Opposition Brief — Exxon Mobil Corp. v. Federal Energy Regulatory Commission (No. 08-212)

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FILED

\\ No. 08-212 NOV 19 2008

IN THE

Supreme Court of the United States

EXXON MOBIL CORPORATION,

Petitioner,

Vv.

FEDERAL ENERGY REGULATORY COMMISSION, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI

JOHN WYETH GRIGGS *

DEBRA B. ADLER

GRIGGS & ADLER, P.C.

12020 Sunrise Valley Drive

Suite 100

Reston, VA 20191-3440

(703) 860-6315

Counsel for OXY USA Inc.

and Union Oil Company

* Counsel of Record of California

November 19, 2008

WILSON-EPES PRINTING CO... INC. — (202) 789-0096 -— WasHinGTOoNn,D. C. 20002

QUESTION PRESENTED

Whether the Constitution permits Congress to

enact legislation for an Article I tribunal that amends

applicable law governing the relief available in a

pending, non-final action.

(i)

RULE 29.6 STATEMENT

Respondent OXY USA Inc. (“OXY”) is a wholly-

owned indirect subsidiary of Occidental Petroleum

Corporation, a publicly held corporation. Occidental

Petroleum Corporation has no parent, nor is there

any publicly held company that holds a 10% or larger

interest in Occidental Petroleum Corporation.

Respondent Union Oil Company of California

(“Union Oil”) is a wholly-owned indirect subsidiary of

Chevron Corporation, which is a publicly held corpo-

ration. Chevron Corporation has no parent, nor is

there any publicly held company that holds a 10% or

larger interest in Chevron Corporation.

TABLE OF CONTENTS

QUESTION PRESENTED ......0.0.0..0.ccccsececeeee0eee

RULE 29.6 STATEMENT ............ccccccccccecescesseeeee

TABLE OF AUTHORITIES .............c.cec0ceceeeeseeee

Tannin ccc cccsnccncesecenccnces

STATEMENT OF THE CASE ............cs0ces000e0000

REASONS FOR DENYING THE PETITION ....

Il.

THE DECISION BELOW IS CONSIS-

TENT WITH PRECEDENTS OF THIS

B. Section 4412(b)(1) Amends Applicable

RN ai icici snscnsspeinntesees

THE D.C. CIRCUITS RULING DOES

NOT CREATE A CONFLICT WITH

EEE sccecnsceressscessesansnentecssecs

EE EL IS

APPENDICES

APPENDIX A: Quality Bank Tariff Filings

Gar BOGS, BIDE, Orn BOGGS ....2..ceccccccccccesccccscess

APPENDIX B: Protest of Flint Hills Re-

sources Alaska LLC to Compliance Filing

ey Be intra cssnsccnssniesenisonsesccevons

(iii)

TABLE OF AUTHORITIES

CASES Page

Arkansas Louisiana Gas Co. v. Hall, 453

RE aoe 8

Crater v. Galaxa, 491 F.3d 1119 (9th Cir.

2007), cert. denied, 128 S. Ct. 2961

ARG ED NS ESPEN Oe ee aR 23, 24

Ex Parte Bakelite Corporation, 279 U.S.

hii icthicecnsthiet heacniaiasenees 12

Glidden v. Zdanok, 370 U.S. 530 (1962)...... 12

Green uv. French, 143 F.3d 865 (4th Cir.

1998), abrogated on other grounds by

Williams v. Taylor, 529 U.S. 362 (2000) .. 24

Guiterrez de Martinez v. Lamagno, 515

a eosoes 25

Immigration and Naturalization Service v.

Chada, 462 U.S. 919 (1983).................0066 17

Lampf, Pleva, Lipkind, Prupis & Petigrow

v. Gilbertson, 501 U.S. 350 (1991)............ 13

Lindh v. Murphy, 96 F.3d 856 (7th Cir.

1996), rev’d on other grounds, 521 U.S.

i 22, 23

Miller vu. French, 530 US. 327

a 16, 17, 20, 22

National Coalition to Save Our Mail

v. Norton, 269 F.3d 1092 (D.C. Cir.

eae cident heicheienchalihcsecteiieteibaiiaaanieabiediid 21, 22, 24, 25

Nixon v. Adm’r of Gen. Servs., 433 U.S.

EFL RAI a ee TNO eT see 20, 21

Pennsylvania v. Wheeling and Belmont

Bridge Co., 59 U.S. (18 How.) 421 (1856) 15, 22

Plaut v. Spendthrift Farms, Inc., 514 U.S.

ee i eiinpaiiniisdsiasstiadnisinconsvaseaid 13, 14, 22, 25

Pope v. United States, 323 U.S. 1 (1944)..... 14, 16

TABLE OF AUTHORITIES—Continued

Page

Robertson v. Seattle Audubon Society, 503

ae Ne sina siccntsevcnstesiscdonsntend 15, 16, 20, 25

Shawnee Tribe v. United States, 423 F.3d

1204 (10th Cir. 2005)... eee eee ee 24, 25

United States v. Brown, 381 U.S. 437

TES ERI Se einem Cs aes ane 18

United States v. Klein, 80 U.S. (13 Wall.)

IIIT iD vcs scnncedocvcspeusiwesiietnenbagionenbdasinniin passim

United States v. Lovett, 328 U.S. 303

SE icitahiesiisnienigniicoieitsteenmiiensnnpeesinibadidaditiniaibis 18

United States v. Sioux Nation of Indians,

4 a eee 12

Williams v. United States, 289 U.S. 553

ERE ELS SII eee ET eo 12

STATUTES AND CONSTITUTIONAL

PROVISIONS

i Ok enn eer mEeee 23, 24

Department of Interior and Related Agencies

Appropriations Act of 1990,

103 Stat. 745 § 318(b\6)(A).............000002... 15, 16

Labor-Management Reporting and Disclo-

sure Act of 1959, 29 U.S.C. § 504............. 18

Prison Litigation Reform Act of 1995, 18

Se eis We ITE ctiricictiieasbdbintcnasibeiinnstitnnenenn 16

Pub. L. No. 108-375, 118 Stat. 1811 § 2841. 24, 25

Safe, Accountable, Flexible, Efficient

Transportation Equity Act: A Legacy for

Users, Pub. L. No. 109-59, 119 Stat.

ee Ec pcicccsciceicsbcnsnvacnieicucavons passim

Securities Exchange Act, § 27A, 15 U.S.C.

a a al 13

TABLE OF AUTHORITIES—Continued

MISCELLANEOUS

Lawrence G. Sager, Klein’s First Principle:

A Proposed Solution, 86 Geo. L. J. 2525

Page

ie ee , .., cocssesnenvesosocoens 18

Os TI SE So icic cs cicscesessecesesvecosenses 10

BT cccncvsdnececvoceosenesoeneues passim

ADMINISTRATIVE DECISIONS

Amerada Hess Pipeline Corp., 69 FERC

Cee sas ccencnnsmnatéennes 4

Amerada Hess Pipeline Corp., 73 FERC

NE Di cicctcccctsceaceccecsnevecstececnseeteoes 4

Amerada Hess Pipeline Corp., 77 FERC

SN 4

Amerada Hess Pipeline Corp., 81 FERC

Oni icsncoptacnnntedsesossoseccenesssoce 4

ARCO Transportation Alaska, Inc., 68

FERC ¥ 62,105 (1994)..............ccccssesesseceees 4

BP Pipelines (Alaska) Inc., 102 FERC

Nc sseesacence 5

BP Pipelines (Alaska) Inc., Opinion No.

502, 123 FERC 961,287 (2008)................. 4

Phillips Alaska Pipeline Corp., 79 FERC

ET I 4

Trans Alaska Pipeline System, Opinion

No. 481, 113 FERC J 61,062 (2005),

affirmed and modified in part, Opinion

No. 481-A, 114 FERC ¥ 61,323 (2006),

clarification granted and _ rehearing

denied, Opinion No. 481-B, 115 FERC

TN EE ae ee 1

IN THE

Supreme Court of the GQnited States

No. 08-212

EXXON MOBIL CORPORATION,

Petitioner,

Vv.

FEDERAL ENERGY REGULATORY COMMISSION, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals —

for the District of Columbia Circuit

BRIEF IN OPPOSITION TO PETITION

FOR A WRIT OF CERTIORARI

INTRODUCTION

Exxon Mobil Corporation (“Exxon Mobil”) in its

Petition for a Writ of Certiorari (“Petition”) seeks

review of an unpublished decision of the United

States Court of Appeals for the D.C. Circuit, Petro

Star, Inc. v. FERC, (Petition Appendix A), which

dismissed numerous petitions for review of the

Federal Energy Regulatory Commission’s (“FERC” or

“Commission”) Opinion No. 481.’ In Opinion No. 481,

' Trans Alaska Pipeline System, Opinion No. 481, 113 FERC

{ 61,062 (2005), affirmed and modified in part, Opinion No.

481-A, 114 FERC { 61,323 (2006), clarification granted and

rehearing denied, Opinion No. 481-B, 115 FERC 4 61,287 (2006).

the FERC «esolved an extensive and complex dispute

involving the Trans Alaska Pipeline System Quality

Bank. The opinion was appealed to the D.C. Circuit

by Exxon Mobil, Union Oil, OXY, BP Exploration

(Alaska) Inc, Petro Star Inc., Williams Alaska

Company, Flint Hills Resources Alaska, LLC, Tesoro

Alaska Petroleum Company and the State of Alaska.

Exxon Mobil is the only party to seek review of the

D.C. Circuit decision.

Exxon Mobil claims that a statute passed by Con-

gress while the Quality Bank case was pending be-

fore the FERC constituted legislative interference in

the judicial process, violating the Constitution’s sepa-

ration of powers. The statute in question, Section

4412(b) of the Safe, Accountable, Flexible, Efficient

Transportation Equity Act: A Legacy for Users, Pub.

L. No. 109-59, limits refunds, in pending Quality

Bank cases, to a period extending back to February 1,

2000, and in future cases to a 15-month period pre-

ceding the earliest, first order imposing Quality Bank

adjustments in the proceeding. Exxon Mobil states

that the statute deprived it of refunds for the period

from December 1993, through February 1, 2000,

amounting to $150 million. Petition at 5-6. Accord-

ing to Exxon Mobil, Section 4412(b)(1) prescribed a

“rule of decision” for a pending case, which this Court

declared to be unconstitutional in United States v.

Klein, 80 U.S. (13 Wall.) 128 (1871). Exxon Mobil

is supported by the Washington Legal Foundation

(“WLF”), which filed an amicus brief.

Respondents Union Oil Company of California

(“Union Oil”) and OXY USA Inc. (“OXY”) are or were

producers of Alaska North Slope crude oil that is of

relatively lower value under the Quality Bank

distillation method.’ They both paid into the Quality

Bank during the period in question, and would be

subject to any retroactive adjustments ordered by

FERC if Exxon Mobil were to obtain the relief it is

requesting. Union Oil and OXY therefore have an

economic interest in this matter and respectfully

request that certiorari be denied.

STATEMENT OF THE CASE

The Statements of the Case set forth in Exxon Mo-

bil’s Petition and the amicus curiae brief filed by

WLF merit comment on three points: the applicabil-

ity of Section 4412(b\(1) to a single case; the interpre-

tation of Section 4412(b)(2); and the refiners’ under-

payment of Quality Bank assessments.

First, Exxon Mobil states that Section 4412(b) of

Public Law No. 109-59 “creates two rules relating to

the Commission’s power to order TAPS Quality Bank

refunds. The first rule, subsection (b)(1), governs only

this proceeding.” Petition at 8. WLF echoes this

claim. Referring to subsection (b)(1), WLF states:

It declared that, with respect to the on-going

TAPS proceedings and no other proceedings,

FERC could not order Quality Bank adjustments

for any period before February 1, 2000.

WLF Brief at 3 (emphasis in original). The second

rule, subsection (b\2), applies to proceedings com-

menced after the date of enactment (August 10, 2005).

The Exxon Mobil statement is correct but poten-

tially misleading; the WLF statement mischaracter-

* OXY divested its North Slope property in an exchange in

December of 2000, but remained subject to the retroactive

Quality Bank adjustments ordered by Opinion No. 481. Union

Oi) is still a producer.

izes Section 4412(b)\(1). Subsection (b)(1) applies to

“proceedings commenced before the date of enact-

ment of this Act.”* It is not by its terms limited to a

single proceeding. It could, at least in theory, have

included several proceedings within its scope. The

Petition and the WLF Brief, without support from the .

legislative history, imply that the subsection was

drafted with the specific intent that it be applied only

to one case.

It is not inconceivable that other proceedings could

have been encompassed within Section 4412(b)(1).

Because the TAPS Carriers file new Quality Bank

tariffs every year, and in light of the fact that such

filings are subject to protests which take time to

resolve, there were several potential proceedings that

could have been included within the scope of Section

4412(b\1).*

* The complete text of Section 4412 is attached to the Petition

as Appendix F.

* Quality Bank tariffs were protested in 2003 when the Naph-

tha cut valuation was changed, and in 2006 when Opinion No.

481 was implemented. Annual revisions of TAPS transportation

rates, as distinguished from Quality Bank rates, have more

frequently been protested. E.g., BP Pipelines (Alaska) Inc.,

Opinion No. 502, 123 FERC 961,287 (2008) (describing annual

transportation rate filings and protests filed in 2005, 2006, and

2007); ARCO Transportation Alaska, Inc., 68 FERC 4 62,105

(1994)(protests leading to suspension of the 1994 transportation

tariffs); Amerada Hess Pipeline Corp., 69 FERC 9 62,257 (1994)

(protests leading to suspension of the TAPS Carriers’ 1995

transportation tariffs); Amerada Hess Pipeline Corp., 73 FERC

4 61,401 (1995) (protests leading to suspension of the 1996

transportation tariffs); Amerada Hess Pipeline Corp., 77 FERC

{ 61,343 (1996) (protests leading to suspension of the 1997

transportation tariffs); Phillips Alaska Pipeline Corp., 79 FERC

¥ 61,100 (1997); Amerada Hess Pipeline Corp., 81 FERC

¥ 61,413 (1997).

On February 27, 2003, the TAPS Carriers filed

Quality Bank tariff changes affecting the value of the

Naphtha cut to take effect on March 1, 2003. The

proposed changes, assigned Docket Nos. IS03-137-

000 through IS03-144-000, were protested by several

parties, and on March 28, 2003, the Commission is-

sued an order accepting the tariff changes, suspend-

ing them subject to refund, ordering hearings, and

incorporating the issues raised into the hearings then

underway in Docket No. OR89-2-000. BP Pipelines

(Alaska) Inc., 102 FERC J 61,345 (2003). Had this

proceeding not been consolidated with Docket No.

OR89-2-000 (the proceeding that produced Opinion

No. 481), then there would have been at least one ad-

ditional Quality Bank proceeding that fell within the

class defined by subsection (b)(1).

The TAPS Carriers filed annual Quality Bank

tariff adjustments in January of 2003 (Docket Nos.

1S03-90-000 through IS03-95-000), January of 2004

(Docket Nos. [S04-149-000 through IS04-153-000),

and January of 2005 (Docket Nos. IS05-121-000

through IS05-125-000). (Appendix A hereto). Each of

these filings took effect without formal action on

FERC’s part because none was protested. However,

had any one or all of these filings been protested,

then they most likely would have remained pending

on the date that Section 4412(b) was enacted and

would have been among the class of proceedings

“commenced before the date of enactment” of Section

4412(b) and subject to the same restrictions on retro-

spective relief that were applied to Docket No. OR89-

2-000.

Second, both Exxon Mobil and WLF assert that

under Section 4412(b)(2), which is applicable to all

Quality Bank proceedings commenced after the date

of enactment of Public Law No. 109-59, Exxon Mobil

would have been entitled to refunds “with no

limitation.” Petition at 8. See also WLF Brief at 3.

However, Section 4412(b\2) has not yet been con-

strued by either the FERC or a court. The inter-

pretation espoused by Exxon Mobil and WLF, while

not disputed by Union Oil or OXY, is only one

possible interpretation of the statute. An interpreta-

tion of Section 4412(b\(2) that would limit refunds

under that subsection even more stringently than the

limitation under subsection (b)(1) has been espoused

by Flint Hills Resources Alaska, LLC in a proceeding

now pending before FERC.

Section 4412(b)(2) of Pub. L. No. 109-59 states:

In a proceeding commenced after the date of

enactment of this Act, the Commission may not

order retroactive changes in TAPS quality bank

adjustments for any period that exceeds the 15-

month period immediately preceding the earliest

date of the first order of the Federal Energy

Regulatory Commission imposing quality bank

adjustments in the proceeding.

The critical words for interpreting the effect of this

provision are “the earliest date of the first order of

the Federal Energy Regulatory Commission imposing

quality bank adjustments in the proceeding.” In BP

Pipelines (Alaska) Inc., FERC Docket No. ORO6-10-

000, Flint Hills Resources Alaska, LLC, has argued

that the first order imposing Quality Bank adjust-

ments does not occur until the compliance phase of a

litigated proceeding, after the entry of the Commis-

sion’s final order.

In summary, given that quality bank adjust-

ments at issue here must be fixed in numerical

form by the compliance filing before they can be

imposed, it follows that the first order imposing

such adjustments, within the meaning of Section

4412, will not occur until Commission approval

of the compliance filing. Consequently, the 15-

month period under Section 4412 will not be cal-

culable until the date of that future order ap-

proving the compliance filing, as that would be

“the earliest date of the first order” imposing

such adjustment in this proceeding. :

Protest of Flint Hills Resources Alaska LLC to Com-

pliance Filing of The TAPS Carriers, filed April 17,

2008. (Appendix B hereto). Exxon Mobil maintains

here, as Union Oil has in Docket No. ORO06-10-000,

that the “first order imposing Quality Bank ad-

justments” is the order at the start of a proceeding

that accepts proposed changes and implements

(“imposes”) them subject to potential modification

and refund after hearings. Petition at 8. This

interpretation of Section 4412 (b)(2) makes retroac-

tive relief available to a date that precedes by over a

year the filing by the Carriers of proposed Quality

Bank changes. If this interpretation were applied to

Docket No. OR89-2-000, it would indeed, as Exxon

Mobil has argued, provide retrospective relief back to

December of 1993. Petition at 14. But FERC has not

yet issued an order in Docket No. ORO6-10-000 to

resolve the competing interpretations of Section 4412

(b)(2).

Third, it is somewhat misleading to state that the

Alaskan refiners “were found to have dramatically

underpaid the Quality Bank for the oil they removed

from the common stream.” Petition at 6. The Initial

Decision made no finding respecting whether the re-

finers had underpaid the Quality Bank. The Initial

Decision did, however, dramatically lower the value

of the Resid cut. Because the refiners return the

Resid cut to TAPS, the Quality Bank methodology

had allowed them a credit for the returned Resid.

The Initial Decision’s reducing the value of Resid in-

dicated that the refiners had received too much credit

over the time period that the distillation methodology

had been in place.*

The distinction is important only because, as

phrased by WLF, it would appear that the refiners

had done something wrong because they had “signifi-

cantly underpaid the Quality Bank.” WLF Brief

at 2. In fact, the refiners, and also Union Oil and

OXY, paid into the Quality Bank the assessments

established by the published TAPS tariffs. They

legally could pay nothing more and nothing less.

Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571,

577-578 (1981).

REASONS FOR DENYING THE PETITION

The Petition does not raise an issue worthy of this

Court’s review. The Court of Appeals properly con-

cluded that Section 4412(b)(1) was not unconstitu-

tional and appropriately dismissed Exxon Mobil’s

appeal. Supreme Court review is unwarranted

because Congress, by enacting Section 4412(b)(1), did

nothing more than amend existing law governing the

relief available from an Article I tribunal.

* Union Oil and OXY produced oil shipped on TAPS that had

relatively more of the Resid cut than the TAPS common stream.

They paid into the Quality Bank during the period in question,

but would be required to pay in more if the lower Resid value

were applied retroactively as Exxon Mobil has requested.

I. THE DECISION BELOW IS CONSISTENT

WITH PRECEDENTS OF THIS COURT

A. Section 4412(b)(1) Is Consistent with

Klein.

Exxon Mobil and WLF argue that Section

4412(b\1) runs afoul of the separation of powers

principles proclaimed in United States v. Klein, 80

U.S. (13 Wall.) 128 (1871). According to Exxon Mobil,

Klein held that Congress is forbidden from “passing

laws that dictate the results in pending cases.” Peti-

tion at 11-12. Exxon Mobil admits that subsequent

decisions have recognized Congress’ power to amend

applicable law, and that Congress may intervene to

change results in pending cases, but only by pre-

scribing rules of general applicability rather than dic-

tating the outcome of a single case. Petition at 13.

Exxon Mobil and WLEF insist that Klein’s proscrip-

tions apply, regardless of whether the case at issue

arose in an Article III court or an Article I tribunal.

Petition at 12; WLF Brief at 19-20.

Klein has very little in common with the present

case. Unlike Section 4412(b), the statute in Klein

directly infringed Article III of the Constitution. The

statute in Klein circumscribed the Supreme Court’s

appellate review authority; it did not merely enact a

standard for decision by a lower Article I tribunal.

Furthermore, in Klein, the Court of Claims had

rendered a final judgment, which was then pending

on appeal to the Supreme Court when the statute

was enacted. Here, by contrast, FERC had not yet

issued its opinion, but rather had before it for review

an initial decision of an Administrative Law Judge.

Finally, in Klein, the statute at issue interfered with

not only the Supreme Court’s Article III jurisdiction,

but also the Executive Branch’s exclusive power under

Article II, Section 2, to grant pardons. In light of

these critical differences, Klein easily is distinguish-

able.

Klein reviewed a statute enacted in 1870 that in-

structed the Supreme Court to rule a certain way in

exercising its appellate review of a Court of Claims

decision. During the Civil War, the federal govern-

ment had come into possession of property aban-

doned by civilians in the rebellious states, including

certain bales of cotton which had been sold and the

proceeds deposited in the Treasury. A statute au-

thorized the Court of Claims to return the property or

its proceeds to the original owner if that owner could

prove his loyalty. The heirs of the owner of the cotton

filed such a claim, and presented a presidential par-

don as proof of loyalty. The Court of Claims entered

judgment in favor of the claimant, and an appeal to

the Supreme Court was taken. Pending the appeal,

Congress attached a proviso to an appropriation

which required that, in any Court of Claims suit, a

pardon introduced in evidence as proof of loyalty

shall instead be considered proof of disloyalty. Con-

gress provided that, if judgment has already been en-

tered, the Supreme Court on appeal shall retain ju-

risdiction only for the purpose of determining

whether a loyalty ruling was based on a pardon, and,

upon determining that issue, shall thereafter dismiss

the case.

The Supreme Court ruled that the 1870 statute

was unconstitutional. It proclaimed that Congress

had by statute prescribed “a rule for the decision”

of a pending case, id. at 146. In so ruling, it is

clear that the Court was primarily concerned with

Congress’ dictating directly to the Supreme Court

how to decide a particular case:

But the language of the proviso shows plainly

that it does not intend to withhold appellate ju-

risdiction except as a means to an end. Its great

and controlling purpose is to deny to pardons

granted by the President the effect which this

court had adjudged them to have. The proviso

declares that pardons shall not be considered by

this court on appeal. We had already decided

that it was our duty to consider them and give

them effect, in cases like the present, as equiva-

lent to proof of loyalty.

Id. at 145. Respecting the effect of the statute, the

Court stated:

The court has jurisdiction of the cause to a given

point; but when it ascertains that a certain state

of things exists, its jurisdiction is to cease and it

is required to dismiss the cause for want of juris-

diction. It seems to us that this is not an exer-

cise of the acknowledged power of Congress to

make exceptions and prescribe regulations to the

appellate power. The court is required to ascer-

tain the existence of certain facts and thereupon

to declare that its jurisdiction on appeal has

ceased, by dismissing the bill. What is this but

to prescribe a rule for the decision of a cause in a

particular way?

Id. at 146. The Court went on to declare this a

violation of the Constitution.

We must think that Congress has inadvertently

passed the limit which separates the legislative

from the judicial power. It is of vital importance

that these powers be kept distinct.

Id. at 147. The Court was equally succinct in stating

that Congress had infringed upon the Executive

Branch as well by revoking presidential pardons.

The rule prescribed is also liable to just exception

as impairing the effect of a pardon, and thus in-

fringing the constitutional power of the Execu-

tive. It is the intention of the Constitution that

each of the great coordinate departments of the

government—the Legislative, the Executive, and

the Judicial—shall be, in its sphere, independent

of the others. To the executive alone is intrusted

the power of pardon; and it is granted without

limit.

Id. at 147.

In rejecting an argument by the government that

Congress by statute had merely retracted the “favor”

of allowing claims against the Executive Branch, the

Court replied that Congress had undertaken to.

interfere with the Judicial Branch, and made clear its

belief that the Court of Claims was at that time

considered an Article III court. Jd. at 144-145.°

Regardless of whether the Court of Claims is an

Article III or Article I court, however, it is clear that

Klein’s primary concern was that the 1870 statute

*WLF incorrectly asserts that the Court of Claims’ status was

clearly understood in the 19th Century to be an Article I court.

WLF Brief at 20. Its status was not clear. In Ex Parte Bakelite

Corporation, 279 U.S. 438, 454-455 (1929), the Supreme Court

stated that the Court of Claims is a legislative (Article I) court,

and asserted that Klein recognized it as such. See also,

Williams v. United States, 289 U.S. 553, 568 (1933) (affirming

Bakelite and distinguishing Klein and other decisions to the

extent they ruled otherwise). Congress in 1953 passed legisla-

tion declaring that the Court of Claims is an Article III court,

and the Supreme Court in Glidden v. Zdanok, 370 U.S. 530,

585-589 (1962), accepted this declaration, distinguishing Bakelite

and Williams. See also, United States v. Sioux Nation of

Indians, 448 U.S. 371, 405 n. 25 (1980) (“at least since 1953, the

Court of Claims has been an Art. III court”).

directly infringed the Supreme Court’s jurisdiction,

thereby violating the separation of powers doctrine.

Id. at 145-146.

Unlike the statute in Klein, Section 4412(b)(1) does

not create a rule for decision by an Article III court.

Instead, it provides a standard for relief available

from an administrative agency which is not an Arti-

cle If] court but instead is an Article I or legislative

court. Moreover, the statute does not reverse par-

dons, reopen judgments, or otherwise dictate a spe-

cific result. By merely limiting the type of relief

available from the agency, it does not usurp the deci-

sion-making function of the FERC, or otherwise im-

pose a “rule of decision” for a specific case. It merely

amends applicable law.

Cases that have construed Klein indicate that Sec-

tion 4412(b)(1) does not run afoul of the “rule of deci-

sion” holding in Klein. In Plaut v. Spendthrift Farms,

Inc., 514 U.S. 211 (1995), the Supreme Court held on

separation of powers grounds that Section 27A of the

Securities Exchange Act, 15 U.S.C. §78aa-1, was un-

constitutional. Section 27A was passed in 1991 to re-

verse the Supreme Court’s Lampf opinion,’ which

had established a uniform, national statute of limita-

tions for litigation under §10(b) and Rule 10b-5. Sec-

tion 27A required courts to reopen final judgments

decided on the basis of Lampf and to allow those

cases to proceed if they met the state limitations law

in effect before Lampf.

In holding that Section 27A was unconstitutional,

the Court actually distinguished Klein: “Whatever

the precise scope of Klein, however, later decisions

" Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501

US. 350 (1991).

have made clear that its prohibition does not take

hold when Congress “amend{s] applicable law.” Plaut

at 218. The Court went on to explain that Section

27A amended applicable law, but it nevertheless “of-

fends a postulate of Article III just as deeply rooted

in our law.” Jd. The Constitution requires that Arti-

cle III courts actually decide cases that come before

them and that retroactively reopening final judg-

ments violates this principle. The Court was careful

to confine its holding to statutes that reopen final

judgments, distinguishing situations in which Con-

gress changes the law while cases are still pending,

or while there is still a right of appeal to a higher

court. Jd. at 226-227. With respect to legislation that

affected final judgments of non-Article III courts, the

court ruled that “These cases distinguish them-

selves.” Id. at 232. The Court acknowledged that

Congress could avoid constitutional problems by in-

cluding prospectivity and general applicability in its

statutes, but stated that even a retroactive statute

that “singles out” a small class or an individual may

not necessarily be unconstitutional. Jd. at 238-239.

The present case is a far cry from Plaut. Here,

there was no final judgment when Congress amended

the applicable law, and the FERC is not an Article III

court. Furthermore, the mere fact that Section

4412(b)(1) applies to a small class, or even a single

case, does not per force render the statute unconsti-

tutional.

Congress’ ability to amend applicable law is rather

broad. In Pope v. United States, 323 U.S. 1 (1944),

the Court of Claims rejected a claim by a government

contractor for over-runs and excavation allowances

under a tunneling contract with the government. Af-

ter final judgment was entered, Congress passed a

special act requiring that the Court of Claims render

judgment at contract rates for certain work under the

Pope contract for which the government received the

use and benefit. The work defined in the statute was

the same work that the Court of Claims had rejected.

The Court of Claims refused to apply the statute,

holding that it violated Klein, but the Supreme Court

reversed. It held that the special act did not require

that the prior judgment be set aside, but rather cre-

ated a new obligation, and that requiring the Court of

Claims to enter judgment on this new obligation was

not unconstitutional. See also Pennsylvania v. Wheel-

ing and Belmont Bridge Co., 59 U.S. (18 How.) 421

(1856) (statute overruling court decision declaring a

bridge to be an obstruction of navigation held not to

violate the Constitution’s separation of powers).

In Robertson v. Seattle Audubon Society, 503 U.S.

429 (1992), the Court again refused to apply Klein.

The statute at issue there addressed two district

court decisions, which enjoined timber harvests that

threatened the endangered spotted owl in thirteen

federal forests in Oregon. In response to the two de-

cisions, Congress enacted Section 318(b)(6)(A) of the

1990 Department of Interior and Related Agencies

Appropriations Act, which stated that management

of the forests in compliance with other provisions of

Section 318 would satisfy the legal requirements that

were the bases for the injunctions issued in the two

cases. In rejecting arguments by the Audubon Soci-

ety that the statute violated Klein, the Court ruled

that Section 318(b\(6A) merely amended applicable

law and did not direct a decision in a pending case.

Id. at 441.

We conclude that subsection 318(b\6)A) com-

pelled changes in the law, not findings or results

under old law. . .. Moreover, we find nothing in

subsection 318(b)\(6)(A) that purported to direct

any particular findings of fact or applications of

law, old or new, to fact.

Id. at 438.

Seattle Audubon explains why the Plaut Court

qualified its reference to Klein with the phrase

“whatever the precise scope of Klein.” Pope and Se-

attle Audubon taken together have pared the “rule of

decision” language in Klein very narrowly. In light of

Pope and Seattle Audubon, it is clear that Klein does

not apply to Section 4412(b)(1). Section 4412(b)(1)

does not compe) findings or results under old law, nor

does it direct any particular findings of fact or appli-

cations of law to fact. It simply limits the extent of

retroactive relief available in pending cases.

Any lingering doubt that Klein should not be nar-

rowly construed was dispelled by Miller v. French,

530 U.S. 327 (2000). There the Supreme Court ex-

pressly distinguished Klein and upheld a statute that

suspended injunctions issued by Article III courts, a

legislative action far more intrusive on the judicial

function than Section 4412(b)\(1).° The Court held:

*The statute at issue is described as follows: “The Prison

Litigation Reform Act of 1995 (PLRA) establishes standards for

the entry and termination of prospective relief in civil actions

challenging prison conditions. §§ 801-810, 110 Stat. 1321-66 to

1321-77. If prospective relief under an existing injunction does

not satisfy these standards, a defendant or intervenor is entitled

to ‘immediate termination’ of that relief. 18 U.S.C. § 3626(b)(2)

(1994 ed., Supp. TV). And under the PLRA's ‘automatic stay’

provision, a motion to terminate prospective relief ‘shall operate

as a stay’ of that relief during the period beginning 30 days

after the filing of the motion (extendable to up to 90 days for

‘good cause’) and ending when the court rules on the motion.

§§ 3626/e)(2), (3).” 530 U.S.at 331.

In contrast to due process, which principally

serves to protect the personal rights of litigants

to a full and fair hearing, separation of powers

principles are primarily addressed to the struc-

tural concerns of protecting the role of the inde-

pendent Judiciary within the constitutional de-

sign. In this action, we have no occasion to decide

whether there could be a time constraint on judi-

cial action that was so severe that it implicated

these structural separation of powers concerns.

The PLRA does not deprive courts of their adju-

dicatory role, but merely provides a new legal

standard for relief and encourages courts to ap-

ply that standard promptly.

Td. at 350. Section 4412(b)(1) similarly provides a

new legal standard for relief. It clearly does not

violate Klein.

Nor does the decision below “eviscerate Klein,” a

claim Exxon Mobil supports with a citation to Justice

Powell’s concurring opinion in Immigration and

Naturalization Service v. Chada, 462 U.S. 919, 966

(1983). Petition at 18. WLF similarly cites Justice

Powell’s concerns. WLF Brief at 12. Chada is com-

pletely inapposite. It held unconstitutional a statute

that permitted a single chamber of Congress to over-

ride via legislative veto a determination made by the

Executive Branch pursuant to delegated authority.

The principle enforced in striking down the statute

was the Constitution’s requirements in Article I that

the Legislative Branch act bicamerally with the par-

ticipation of the President. Jd. at 951, 957-958. In

the instant case, Section 4412(b)(1) complied with all

of the legislative restraints on abuse of legislative

power built into Article I that were the focus of Jus-

tice Powell’s remarks. Moreover, Justice Powell was

addressing a legislative veto of a decision by the Im-

migration and Naturalization Service to allow Mr.

Chada permanent residency, an action with far more

immediate and specific consequences than the legis-

lative action at issue here.

Not only does section 4412(b)(1) not violate Klein,

neither is the statute an unconstitutional bill of

attainder, as Exxon Mobil seems to imply by its

citation of United States v. Brown, 381 U.S. 437

(1965). Petition at 11, 13. “Legislative acts, no

matter what their form, that apply either to named

individuals or to easily ascertainable members of a

group in such a way as to inflict punishment on

them without a judicial trial are bills of attainder

prohibited by the Constitution.” Jd. at 448-449

(quoting United States v. Lovett, 328 U.S. 303, 315-

316 (1946). Brown held that Section 504 of the

Labor-Management Reporting and Disclosure Act,

which singled out union officials for punishment due

to their membership in the Communist Party, was a

constitutionally proscribed bill of attainder. Section

4412(b)(1) by contrast does not identify Exxon Mobil,

or any class to which Exxon Mobil belongs, so as to

inflict punishment on it without a trial.

B. Section 4412(b)(1) Amends Applicable

Law on Refunds

Both Exxon Mobil and WLF admit that Klein does

not prevent Congress from enacting rules of general

applicability. Petition at 12-13; WLF Brief at 9, 11-

12. However, they claim that, in Section 4412(b)(1),

Congress did not merely amend existing law with a

rule of general applicability. But contrary to Exxon

Mobil and WLF’s assertion, this is a case “where Con-

gress amended the law governing the Commission’s

refund power and the tribunal simply applied the

new law to a matter pending before it.” Petition at 14.

In adopting Section 4412(b), Congress provided two

rules to govern retrospective relief, one that applies

to all cases that were commenced prior to the effec-

tive date of the legislation, and a different rule that

applies to all cases commenced after the effective

date of the legislation. While the distinction between

pending cases and future cases created two different

classes, the rules for each class are stated in terms of

general applicability. There is no clue on the face of

the statute itself that only a single case is subject to

the rule for pending cases.

Exxon Mobil argues the contrary, that Section

4412(b)(1) “does not amend applicable law; instead, it

impermissibly directs results in a single pending ad-

judication under old law.” Petition at 14. WLF picks

up the refrain, arguing “there is no credible argu-

ment that when it prescribed a rule of decision in this

case, Congress also changed the underlying generally

applicable law.” WLF Brief at 10. However, there is

a credible argument that Congress prescribed a rule

of general applicability when it enacted Section

4412(b)(1). Simply stating that the statute does not

amend applicable law, but instead directs results in a

single case, does not make it so.

The language of Section 4412(b)(1) is couched in

terms of general applicability:

In a proceeding commenced before the date of

enactment of this Act, the Federal Energy Regu-

latory Commission may not order retroactive

changes in TAPS quality bank adjustments for

any period before February 1, 2000.

Nowhere does the statute identify or refer to Docket

No. OR89-2-000, the proceeding that produced Opinion

No. 481. It does not “direct any particular findings

of fact or applications of law, old or new, to fact.”

Seattle Audubon at 438. Under the standards recog-

nized in Seattle Audubon and Miller v. French, the

statute clearly amends applicable law.

Nowhere does the statute by its terms indicate that

it is limited to a single case. By its terms, it applies

to all Quality Bank cases that were pending in

August, 2005, a class that in actuality included only

one case—Docket No. OR89-2-000—but that also

could have included other cases, had any of the

annual filings in January 2003, 2004, or 2005 been

protested, or had the March 2003 Naphtha change

not already been consolidated with Docket OR89-2-

000.

Even the fact that only one Quality Bank case was

pending before FERC when the statute was enacted

does not prove that the statute was not a rule of

general applicability. The statute at issue in Pope

applied to a single case, and yet the Supreme Court

held that it did not violate the rule adopted in Klein.

The same can be said for Seattle Audubon: a pair of

cases was the subject of that statute, yet the Court

still found that Congress had changed applicable law

and not violated Klein. And, as admitted by the

Petition at 16, and the WLF Brief at 15, Congress

may always legislate regarding a legitimate class of

one. Nixon v. Adm’r of Gen. Servs., 433 U.S. 425, 472

(1977).

In fact, Exxon Mobil’s complaint is similar to the

complaint lodged by Former President Nixon: “In

essence, he argues that Brown establishes that the

Constitution is offended whenever a law imposes

undesired consequences on an individual or on a class

that is not defined at a proper level of generality.”

433 U.S. at 469-470. The Supreme Court rejected

this argument:

His view would cripple the very process of legis-

lating, for any individual or group that is made

the subject of adverse legislation can complain

that the lawmakers could and should have de-

fined the relevant affected class at a greater level

of generality. Furthermore, every person or

group made subject to legislation which he or it

finds burdensome may subjectively feel, and can

complain, that he or it is being subjected to un-

warranted punishment. However expansive the

prohibition against bills of attainder, it surely

was not intended to serve as a variant of the

equal protection doctrine, invalidating every Act

of Congress or the States that legislatively bur-

dens some persons or groups but not all other

plausible individuals.

Id. at 470-471 (citations and footnotes omitted).

Similarly, the argument here that Section 4412(b)(1)

is unconstitutional because it impacts a single case

and treats pending litigants differently than future

litigants must be rejected.

Il. THE D.C, CIRCUIT’S PULING DOES NOT

CREATE A CONFLICT WITH OTHER

CIRCUITS

In rejecting Exxon Mobil’s constitutional challenge

to Section 4412(b)(1), the D.C. Circuit relied princi-

pally on National Coalition to Save Our Mall v. Nor-

ton, 269 F.3d 1092 (D.C. Cir. 2001). See Petro Star,

Inc. v. FERC, Petition App. A. (“As to petitioners’

separation of powers argument, any claim that Con-

gress’ decision here unconstitutionally exercised judi-

cial power is foreclosed by our decision in National

Coalition to Save Our Mall v. Norton, 269 F.3d 1092

(D.C. Cir. 2001).”) Exxon Mobil contends that the

D.C. Circuit’s reading of Klein in Petro Star and Na-

' tional Coalition conflicts with decisions of the Sev-

enth, Ninth, Fourth, and Tenth Circuits. Petition at

19-20. However, the cases cited by Exxon Mobil all

involved statutes that the courts upheld, and there-

fore there is no conflict between these cases and Na-

tional Coalition.

In National Coalition, the D.C. Circuit refused to

declare unconstitutional a statute that exempted

from judicial review the decision undertaken by

several agencies to construct the World War II

Memorial on the Mall. The Coalition, like Exxon

Mobil here, complained that the case-specific nature

of the statute singling out one proceeding that was

pending when Congress acted violated the “rule of

decision” holding of Klein. After reviewing Klein and

the Supreme Court decisions construing it, the Court

rejected this challenge:

In view of Plaut, Miller v. French and Wheeling

Bridge, we see no reason why the specificity

should suddenly become fatal merely because

there happened to be a pending lawsuit.

269 F.3d at 1097.

Exxon Mobil claims that Lindh v. Murphy, 96 F.3d

856 (7th Cir. 1996), rev'd on other grounds, 521 US.

320 (1997), is inconsistent with Petro Star and

National Coalition. It is not. In the first place, the

issues in Lindh were very different. Lindh concerned

a murder conviction appealed to the state’s highest

court, which Lindh challenged in an independent

habeas corpus suit in federal court. The federal

action was dismissed, Lindh appealed to the Seventh

Circuit, and while the appeal was pending, Congress

passed a statute, 28 U.S.C. § 2254(d), governing the

effect to be given in habeas proceedings to findings of

fact in state courts. The Seventh Circuit applied the

new law and denied Lindh’s appeal. Hence, based on

the holding of the case, it is entirely consistent with

the action taken in Petro Star.

Secondly, in rejecting various constitutional chal-

lenges made by Lindh, what the Seventh Circuit said

about Klein is not inconsistent with the result

reached in the present case:

Congress cannot say that a court must award

Jones $35,000 for being run over by a postal

truck, but it may prescribe maximum damages

for categories of cases, or provide that victims of

torts by federal employees cannot receive puni-

tive damages.

Id. at 872 (citations omitted). In Section 4412(b)(1),

Congress did not say that Exxon Mobil cannot be

awarded an additional $150 million in refunds. In-

stead, as the Seventh Circuit indicated it can, Con-

gress established a maximum amount of refunds,

limiting them to a five-and-one-half-year retrospec-

tive period (February 1, 2000 through October 31,

2005).

Crater v. Galaxa, 491 F.3d 1119 (9th Cir. 2007),

cert. denied, 128 S. Ct. 2961 (2008), which Exxon

Mobil cites as an example of a conflict with the D.C.

Circuit, also involved a state court criminal convic-

tion and the same statute modifying habeas corpus

relief in a collateral federal proceeding. In rejecting

the claim that 28 U.S.C. § 2254(d) violates Klein, the

Ninth Circuit held:

Section 2254(d\(1) does not instruct courts to dis-

cern or to deny a constitutional violation. In-

stead, it simply sets additional standards for

granting relief in cases where a petitioner has al-

ready received an adjudication of his federal

claims by another court of competent jurisdic-

tion. The Constitution does not forbid Congress

from establishing such standards, as the Fourth

Circuit has eloquently explained.

Id. at 1127.

The Fourth Circuit opinion referred to by the

Seventh Circuit, Green v. French, 143 F.3d 865 (4th

Cir. 1998), abrogated on other grounds by Williams

v. Taylor, 529 U.S. 362 (2000), is also cited by Exxon

Mobil as a decision that conflicts with National

Coalition. Green v. French rejected the argument

that 28 U.S.C. 2254(d) violates the constitutional

separation of powers doctrine, stating:

In amending section 2254(d)(1), Congress has

simply adopted a choice of law rule that prospec-

tively governs classes of habeas cases; it has not

subjected final judgments to revision, nor has it

dictated the judiciary’s interpretation of govern-

ing law and mandated a particular result in any

pending case. And amended section 2254(d) does

not limit any inferior federal court’s independent

interpretive authority to determine the meaning

of federal law in any Article III case or contro-

versy.

Id. at 874-875.

The final case cited by Exxon Mobil as being in con-

flict with National Coalition is also not in conflict.

Shawnee Tribe v. United States, 423 F.3d 1204 (10th

Cir. 2005), rejected a constitutional challenge to Pub.

L. No. 108-375, § 2841, a statute that rendered moot

a pending lawsuit seeking a transfer of federal prop-

erty to the tribe. The court stated: “Although Klein

might be read broadly, it has been significantly lim-

ited by subsequent Supreme Court decisions.” Jd. at

1217 (citing Plaut and Seattle Audubon). In applying

these decisions to the case before it, the court held:

In this case, § 2841 simply provides a superven-

ing way to dispose of the particular Sunflower

Property. As long as the Secretary of the Army

exercises that authority to dispose of the prop-

erty, we hold that any claim under § 523 is moot.

However, § 2841 itself purports neither to compel

a particular decision in the case before us nor to

decide how the law applies to our specific facts.

That function is left to us as a court. Therefore,

we conclude that § 2841 is a constitutional exer-

cise of Congress’s power to amend existing law

and make it applicable to the property which is

the subject of this pending case.

Id. at 1218.

Exxon Mobil seems to concede that these decisions

may not be in conflict with National Coalition,

Petition at 22, but requests certiorari nevertheless

to quell what Exxon Mobil terms “a raging dispute”

over the meaning of Klein. In addition to several

periodicals, Exxon Mobil cites a Supreme Court case

in which Klein is mentioned in a passing reference

but is not part of the Court’s holding. Guiterrez de

Martinez v. Lamagno, 515 U.S. 417, 430 (1995). The

debate over Klein appears to focus on whether, in

light of Seattle Audubon, Klein has any vitality

beyond its specific facts.” Whatever the merits of this

* Notwithstanding the academic interest in Klein, the com-

mentators do not appear to suggest an interpretation that would

make Klein applicable to the facts of this case. See, eg., L.G.

dispute, the present case does not present a clear

conflict among the circuits with respect to the proper

interpretation of Klein. To the contrary, in the exam-

ples cited by Exxon Mobil, Klein has been applied in

a consistent manner, not only in the case at bar but

in the decisions of other circuits.

CONCLUSION

Union Oil Company of California and OXY U.S.A.

Inc. respectfully request that the Court deny the

petition for a writ of certiorari. The D.C. Circuit’s

decision in Petro Star v. FERC is consistent with

precedent of this Court and it does not conflict with

the law applied in other circuits.

Respectfully submitted,

JOHN WYETH GRIGGS *

DEBRA B. ADLER

GRIGGS & ADLER, P.C.

12020 Sunrise Valley Drive

Suite 100

Reston, VA 20191-3440

(703) 860-6315

Counsel for OXY USA Inc.

and Union Oil Company

* Counsel of Record of California

November 19, 2008

Sager, Klein's First Principle: A Proposed Solution, 86 Geo. L. J.

2525, 2579 (1998) (“This is how we should understand the first

principle of U.S. v. Klein: The judiciary will not allow itself to be

made to speak and act against its own best judgment on matters

within its competence which have great consequences for our

political community.”)

APPENDIX

ae see ee

APPENDIX A

Quality Bank Tariff

Filing January 2003, FERC Docket Nos.

ISO3 90-000 through IS90-95-000

(Logo]

January 24, 2003

- OIL PIPELINE FILING

SPECIAL PERMISSION REQUESTED,

Magalie Salas, Secretary

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

Re: Amerada Hess Pipeline Corporation Supplement

No. 3 to F.E.R.C. No. 52; BP Pipelines (Alaska)

Inc. Supplement No. 3 to F.E.R.C. No. 23;

ExxonMobil Pipeline Company Supplement No. 3

to F.E.R.C. No. 69 Phillips Transportation

Alaska, Inc. Supplement No. 3 to F.E.R.C. No. 4

Unocal Pipeline Company Supplement No. 3 to

F.E.R.C. No. 206; Williams Alaska Pipeline

Company, L.L.C. Supplement No. 3 to F.E.R.C.

No. 4

Dear Ms. Salas:

Enclosed for filing are three copies of each of the

following identical tariffs:

Amerada Hess Pipeline Corporation Supplement

No. 3 to F.E.R.C. No. 52; BP Pipelines (Alaska)

Inc. Supplement No. 3 to F.E.R.C. No. 23;

ExxonMobil Pipeline Company Supplement No. 3

to F.E.R.C. No. 69 Phillips Transportation

Alaska, Inc. Supplement No. 3 to F.E.R.C. No. 4

Unocal Pipeline Company Supplement No. 3 to

F.E.R.C. No. 206; Williams Alaska Pipeline

Company, L.L.C. Supplement No. 3 to F.E.R.C.

No. 4

The companies issuing these tariffs are collectively

referred to herein as the TAPS Carriers.

On December 17, 1997 the Federal Energy

Regulatory Commission issued Order Approving

Contested Settlement in Docket Nos. OR89-2-007,

et al. Trans Alaska Pipeline System, 81 F.E.R.C.

q@ 61,319 (1997). On January 13, 1998 the Alaska

Public Utilities Commission (*APUC”) issued its

Order Adopting Federal Energy Regulatory Com-

mission Order Approving Contested Settlement in

Docket Nos. P-89-1, et al. In re Formal Complaint

of Tesoro Alaska Petroleum Co., Order P-89-1(87)

(1998). One of the terms of the settlement approved

by the Commission and the APUC is embodied in

Item III.G.4. of the tariffs to which the enclosed

tariffs are supplements. It requires that the adjust-

ments to the reference prices for Light Distillate,

Heavy Distillate and Resid in Attachment 2 to the

tariffs be revised each year in accordance with a

specified formula.

The enclosed tariffs are filed in compliance with

the orders of this Commission and the APUC and

Item 111.G.4. of the tariffs. Attachment 2C reflects

revised adjustments to the reference prices for the

Light Distillate, Gulf Coast Heavy Distillate and

Resid components for the year 2002 calculated in

accordance with the method prescribed in Item

III.G.4. A table showing the calculation is attached as

Exhibit A.

In accordance with orders of this Commission and

the APUC’s successor, the Regulatory Commission of

Alaska (“RCA”) and Item ITI.G.5. of the tariffs, the

reference price of West Coast Heavy Distillate has

not been revised. Pending a final decision by the

Commission and the RCA on the appropriate

processing cost adjustment to the replacement

product price, the Quality Bank continues to use the

October 1999 adjusted reference price for West Coast

Heavy Distillate. See Trans Alaska Pipeline System,

90 F.E.R.C. J 61,123 (2000); In re Filing of a Notice

by the Trans Alaska Pipeline System Quality Bank

Administrator, P-99-12(2) (2000).

Pursuant to Section 6(3) of the Interstate

Commerce Act and 18 C.F.R. § 341.14, the TAPS

Carriers request special permission for the enclosed

tariffs to be effective on February 1, 2003, which is

seven days’ notice. As noted above, these tariffs are

filed to comply with the orders of this Commission

and the APUC and Item III.G.4. of the presently

effective Quality Bank Methodology tariffs. Moreover,

the data necessary to calculate the revised adjust-

ments (from the January Oil & Gas Journal) is not

available in time to make the required tariff filing

more than 30 days prior to February 1, 2003. Because

the Quality Bank adjustments are calculated on a

monthly basis, it is important that the tariff revisions

become effective on February 1, 2003.

Pursuant to 18 C.F.R. § 343.3 of the Commission’s

regulations, each of the TAPS Carriers other than

Williams Alaska Pipeline Company, L.L.C. hereby

requests that any protest to its enclosed filing be

telefaxed at the time it is filed to its counsel, John E.

Kennedy, at the following telefax number (713) 615-

5273. Williams Alaska Pipeline Company, L.L.C.

requests that any protest to its enclosed filing be

telefaxed to its counsel, Tim McCoy, at the following

telefax number (918) 573-8024.

I hereby certify that on or before this day a copy of

the enclosed tariffs has been sent to each subscriber

on the subscriber list of the appropriate TAPS

Carrier by first-class mail or other agreed-upon

means of transmission.

Any questions regarding the accompanying tariff

should be addressed to John E. Kennedy at (713) 758-

2550.

Respectfully submitted,

/s/ John E. Kennedy

John E. Kennedy

Counse! for Amerada Hess

Pipeline Corporation,

BP Pipelines (Alaska) Inc.,

ExxonMobil Pipeline Company,

Phillips Transportation

Alaska, Inc., and

Unocal Pipeline Company

Exhibit A

TAPS Quality Bank

index Ratio & Price Adjustments

(Thie year's Price Adjustments) = (Last years Price Adjustments) x (Index Ratio)

Gulf Coast Wee Comet

—{eGe) ___ ($/88t) — Ge) _(g/88)

| RN ere

x02 0 0.6412. 0.2273 05412 02273

203 «s« 0.5161 0.2163 05151 02183

Heevy Otstifiate

202 (2.1643 9088 -1.0821 0.445

203 isi‘«-20SSti«é~S. GS -1.0000 4.4326

Read

> AO +8603 -2.0465! 4 6650 -2.0461

203 «4637 = = -1 9468 4~6x7 “1.9468

Report Date: 01/14/2002

Supplement No. 3 to F.E.R.C No. 52 (Amerada)

Supplement No. 3 to F.E.R.C. No. 23 (BP)

Supplement No. 3 to F.E.R.C. No. 69 (ExxonMobil)

Supplement No. 3 to F.E.R.C. No. 4

(Phillips Transportation)

Supplement No. 3 to F.E.R.C. No. 206 (Unocal)

Supplement No. 3 to F.E.R.C No. 4 (Williams)

AMERADA HESS PIPELINE CORPORATION

(AMERADA)

BP PIPELINES (ALASKA) INC. (BP)

EXXONMOBIL PIPELINE COMPANY

(EXXONMOBIL)

PHILLIPS TRANSPORTATION ALASKA, INC.

(PHILLIPS TRANSPORTATION)

UNOCAL PIPELINE COMPANY (UNOCAL)

WILLIAMS ALASKA PIPELINE COMPANY, L.L.C.

(WILLIAMS)

LOCAL PIPELINE TARIFF

CONTAINING THE TAPS

QUALITY BANK METHODOLOGY

GENERAL APPLICATION

ISSUED JANUARY 24, 2003

EFFECTIVE FEBRUARY 1, 2003

This tariff shall apply only to those tariff which

specifically incorporate this thrift supplements so

this tariff and successive issues hereof by reference.

SPECIAL PERMISSION REQUESTED

Issued on seven days’ notice under authority of 18

C.F.R. § 341.14. This tariff publication is condition-

ally accepted subject to refund pending a 30-day

review period.

The increases noted in Attachment 2C are made to

comply with this Commission’s Order Adopting Con-

tested Settlement in Docket No. OR89-2-007, et al.,

Trans Alaska Pipeline System, 81 F.E.R.C. 1 61,319

(1997), and the Alaska Public Utilities Commission’s

Order Adopting Federal Energy Regulatory Commis-

sion Order Approving Contested Settlement in

Docket Nos. P89-1, et al, In re Formal Complaint of

Tesoro Alaska Petroleum Co., Order P89-1(87) (1998).

For rules and regulations other than the TAPS

Quality Bank Methodology tariff, see F.E.R.C. No. 41

(Armada), F.E.R.C. No. 26 (BP), F.E.R.C. No. 110

(ExxonMobil), F.E.R.C. No. 10 (Phillips Transporta-

tion), F.E.R.C No. 189 (Unocal), F.E.R.C. No 2

(Williams), supplements thereto and reissues thereof.

The provisions published herein will, if effective,

not result in an effect on the quality of the human

environment.

Issued By

Donald C. Lutken, Jr., Albert N. Bolen,

President President

AMERADA HESS PIPELINE BP PIPELINES

CORPORATION (ALASKA) INC.

One Allen Center 900 East Benson Boulevard

500 Dallas Street, Level 2 P.O. Box 190848

Houston, Texas 77002 Anchorage, Alaska 99519

Mike P. Tudor, President Joseph A. Blount,

EXXONMOBIL PIPELINE President

COMPANY UNOCAL PIPELINE COMPANY

P.O. Box 2220 14141 Southwest Freeway

Houston, Texas 77252 Sugar Land, Texas 77478

John M. Christal,

Vice President and

Controller

PHILLIPS TRANSPORTATION

ALASKA, INC.

700 G Street, ATO-920

Anchorage, Alaska 99501

Tina R. Changer,

Manager, Pipeline Tariffs

WILLIAMS ALASKA PIPELINE

COMPANY, LLC.

1800 S. Baltimore Avenue

Tulsa, Oklahoma 74119

COMPILED BY

John E. Kennedy

1001 Fannin Street

Houston, Texas 77002

(713)758-2550

Attachment 2C cancels Attachment 2B

ATTACHMENT 2C

COMPONENT UNIT VALUE PRICING BASIS

PROPANE (C,)

United States Gulf Coast | United States West Coast

Platt’s Mt. Belvieu, TX OPIS’s (weekly) Los

spot quote for Propane. Angeles delivered spot

quote for Propane

ISOBUTANE (IC,)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Isobutane

OPIS’s (weekly) Los

Angeles delivered spot

quote for Isobutane

NORMAL BUTANE (nC,)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Normal

Butane

OPIS’s (weekly) Los

Angeles delivered spot

quote for Norma! Butane

LIGHT STRAIGHT RUN (C, - 175°)

United States Gulf Coast

| United States West Coast |

Platt’s Mt. Belvieu, TX

spot quote for Natural

Non-Dynergy

OPIS’s (weekly) Los

Angeles delivered spot

quote for Natural

Gasoline

NAPHTHA (175° - 350°F)

United States Gulf Coast

'Platt’s U.S Gulf Coast

spot quote for

| Waterborne Naptha

United States West Coast |

Platt’s USGulfCoast |

spot quote for

Waterborne Naptha |

10a

LIGHT DISTILLATE (350° - 450°F)

United States Gulf Coast

United States West Coast

Platt’s U.S. Gulf Coast,

spot quote for

Waterborne Jet Kerosene

| 54 less 0.5151 cents per

allon [D]

Platt’s U.S. West Coast,

spot quote for

Waterborne Jet Fuel less

0.5151 cents per gallon

(D]

HEAVY DISTILLATE (450° - 650°F)

United States Gulf Coast

United States West Coast

Platt’s U.S. Gulf coast,

spot quote for

Waterborne No. 2 less

2.0598 cents per gallon

\D]

Platt’s U.S. West Coast,

spot quote for

Waterborne Gasoil for

October, 1999 less 0.9973

cents per gallon

GAS OIL (650° - 1050°F)

United States Gulf Coast

United States West Coast

OPSI’s U.S. Gulf Coast

spot for barge High

Platt’s U.S. West Coast,

spot quote for barge High

Sulfur VGO Sulfur VGO

RESID (1050°F and Over)

United States Gulf Coast | United States West Coast

Platt’s U.S. Gulf Coast

spot quote for

Waterborne No. 6 Fuel

Oil 3.0% Sulfur less

4.6347 cents per gallon

Platt’s U.S. West Coast,

spot quote for Pipeline

380 cst at Los Angeles

converted to $/Bbl using

6.37 BbI/MT less 4.6347 _

cents per gallon [D] |

Explanation of symbols:

[D) Decrease

[W] Change in wording only

lla

Quality Bank Tariff

Filing January 2004, FERC Docket Nos.

1S04-149-000 through I1S04-153-000

[Logo

January 16, 2004

OIL PIPELINE FILING

SPECIAL PERMISSION REQUESTED

Magalie Sales, Secretary

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

Re: BP Pipelines (Alaska) Inc. Supplement No. 6 to

F_E.R.C. No. 23 ExxonMobil Pipeline Company

Supplement No. 6 to F.E.R.C. No. 69 Phillips

Transportation Alaska, Inc. Supplement No. 6 to

F.E.R.C. No. 4 Unocal Pipeline Company

Supplement No. 6 to F.E.R.C: No. 206; Williams

Alaska Pipeline Company, L.L.C. Supplement

No. 6 to F.E.R.C. No. 4

Dear Ms. Salas:

Enclosed for filing are three copies of each of the

following identical tariffs:

BP Pipelines (Alaska) Inc. Supplement No. 6 to

F.E.R.C. No. 23; ExxonMobil Pipeline Company

Supplement No. 6 to F.E.R.C. No. 69 Phillips

Transportation Alaska, Inc. Supplement No. 6 to

F.E.R.C. No. 4 Unocal Pipeline Company

Supplement No. 6 to F.E.R.C. No. 206; Williams

Alaska Pipeline Company, L.L.C. Supplement

No. 6 to F.E.R.C. No. 4

12a

The companies issuing these tariffs are collectively

referred to herein as the TAPS Carriers.

On December 17, 1997 the Federal Energy Regula-

tory Commission issued Order Approving Contested

Settlement in Docket Nos. OR89-2-007, et al. Trans

Alaska Pipeline System, 81 F.E.R.C. 7 61,319 (1997).

On January 13, 1998 the Alaska Public Utilities

Commission (“APUC”) issued its Order Adopting

Federal Energy Regulatory Commission Order Ap-

proving Contested Settlement in Docket Nos. P-89-1,

et al. In re Formal Complaint of Tesoro Alaska

Petroleum Co., Order P-89-1(87) (1998). One of the

terms of the settlement approved by the Commission

and the APUC is embodied in Item III.G.4. of the

tariffs to which the enclosed tariffs are supplements.

It requires that the adjustments to the reference

prices for Light Distillate, Heavy Distillate and Resid

in Attachment 2 to the tariffs be revised each year in

accordance with a specified formula.

The enclosed tariffs are filed in compliance with

the orders of this Commission and the APUC and

Item III.G.4. of the tariffs. Attachment 2F reflects

revised adjustments to the reference prices for the

Light Distillate, Gulf Coast Heavy Distillate and

Resid components for the year 2003 calculated in

accordance with the method prescribed in Item

111.0.4. A table showing the calculation is attached

as Exhibit A.

In accordance with orders of this Commission and

the APUC’s successor, the Regulatory Commission of

Alaska (“RCA”) and Item III.G.5. of the tariffs, the

reference price of West Coast Heavy Distillate has

not been revised. Pending a final decision by the

Commission and the RCA on the appropriate process-

ing cost adjustment to the replacement product price,

l3a

the Quality Bank continues to use the October 1999

adjusted reference price for West Coast Heavy Distil-

late. See Trans Alaska Pipeline System, 90 F.E.R.C. J

61,123 (2000); In re Filing of a Notice by the Trans

Alaska Pipeline System Quality Bank Administrator,

P-99-12(2) (2000).

Although the enclosed tariff uses the symbol [U} for

“Unchanged rate” in Attachment 2F, the figure

following that symbol! is not, in fact, a rate, but an

adjustment to a reference price used in the Quality

Bank methodology.

Pursuant to Section 6(3) of the Interstate Com-

merce Act and 18 C.F.R. § 341.14, the TAPS Carriers

request special permission for the enclosed tariffs to

be effective on February 1, 2004, which is fifteen

days’ notice. As noted above, these tariffs are filed to

comply with the orders of this Commission and the

APUC and Item III.G.4. of the presently effective

Quality Bank Methodology tariffs. Moreover, the data

necessary to calculate the revised adjustments (from

the January Oil & Gas Journal) is not available in

time to make the required tariff filing more than 30

days prior to February 1, 2004. Because the Quality

Bank adjustments are calculated on « monthly basis,

it is important that the tariff revisions become

effective on February 1, 2004.

Pursuant to 18 C.F.R. § 343.3 of the Commission’s

regulations, each of the TAPS Carriers other than

Williams Alaska Pipeline Company, L.L.C. hereby

requests that any protest to its enclosed filing be

telefaxed at the time it is filed to its counsel, John E.

Kennedy, at the following telefax number (713) 615-

5273. Williams Alaska Pipeline Company, L.L.C.

requests that any protest to its enclosed filing be

14a

telefaxed to its counsel, Timothy E. McCoy, at the

following telefax number: (918) 573-8024.

I hereby certify that on or before this day a copy of

the enclosed tariffs has been sent to each subscriber

on the subscriber list of the appropriate TAPS

Carrier by first-class mail or other agreed-upon

means of transmission.

Any questions regarding the accompanying tariff

should be addressed to John E. Kennedy at (713) 758-

2550.

Respectfully submitted,

/s/ John E. Kennedy

John E. Kennedy

Counsel for BP Pipelines

(Alaska) Inc.,

ExxonMobil Pipeline Company,

Phillips Transportation Alaska,

Inc., and

Unocal Pipeline Company

Exhibit A

TAPS Quality Bank

index Ratio & Price Adjustments

Effective: February, 2004

Nelson-Farrar index Ratio

[ index Ratio: 400.7 / 422.0 «= 1.0916 eo

index Oste iesus Date lnvdex index Date issue Dete index

Sep-2001 2/4/2002 426.6 Sep-2002 2/3/2003 448.2

Oct-2001 4/2002 417.7 Oct-2002 VYH¥2003 453.2

Nov-2001 4/1/2002 4158 Nov-2002 4/7/2003 448.2

Dec-2001 5/6/2002 410.3 Dec-2002 5/5/2003 450.5

Jarry 2002 6/3/2002 4124 Jar 2003 6/2/2003 461.4

Feb-2002 7/1/2002 414.1 Feb-2003 7/1/2003 478.6

Mar-2002 8/5/2002 418.4 Mas-2003 8/4/2003 485.3

Apr-2002 9/2/2002 424.5 Apr-2003 9/8/2003 459.3

May-2002 10/7/2002 427.1 May-2003 1048/2003 455.2

Jun 2002 11/4/2002 431.0 Jur-2003 11/3/2003 4612

Jub2002 12/2/2002 433.1 Juk2003 12/1/2003 4655

Aug-2002 1/6/2003 433.4 Aug- 2003 1 461.7

| Average 422.0} Average 460.

Re*erence Price Adjustments

(This year’s Price Adjustments) = (Last year's Price Adjustments) x (Index Ratio)

Guit Coast Weet Const

—_{e/Gal)__($/BBL) —_{e/Ga)__ (3/88) _

‘Ugnt Otstillete

203 «(0.5151 0216 0.6161 02168

2004 405623 02582 4.5623 0 2%2

Heevy Distillate

200-—«—s««2.0586Bs«) 8851 1.0000 0.4326

2004 22465 09444 1.1243 4.4722

Resic

203 «4 6347s - 1.4656 4.6347 -1.9466

2004 40592 -2.1249 4 0692 2.1249

Repo Date: 1/9/2004

ect

16a

Supplement No. 6 to F.E.R.C. No. 23 (BP),

Supplement No. 6 to F.E.R.C. No. 69 (ExxonMobil)

Supplement No. 6 to F.E.R.C. No. 4 (Phillips

Transportation)

Supplement No. 6 to F.E.R.C. No. 206 (Unocal)

Supplement No. 6 to F.E.R.C. No. 4 (Williams)

Cancels Supplement No. 5 for the respective FERC

tariffs listed above

BP PIPELINES (ALASKA) INC. (BP)

EXXONMOBIL PIPELINE COMPANY

(EXXONMOBIL)

_ PHILLIPS TRANSPORTATION ALASKA, INC.

(PHILLIPS TRANSPORTATION)

UNOCAL PIPELINE COMPANY (UNOCAL)

WILLIAMS ALASKA PIPELINE COMPANY, L.L.C.

(WILLIAMS)

LOCAL PIPELINE TARIFF

CONTAINING THE TAPS

QUALITY BANK METHODOLOGY

Issued January 16 2004

Effective February 1, 2004

GENERAL APPLICATION

This tariff shall apply only to those tariffs which

specifically incorporate this tariff supplements to this

tariff and successive issues hereof, by reference.

NOTICES

The changes noted in Attachment [W] 2F are made

to comply with this Commission’s Order Adopting

Contested Settlement in Docket No. OR89-2-007,

et al., Trans Alaska Pipeline System, 81 F.E.R.C.

{ 61,319 (1997), and the Alaska Public Utilities

17a

Commission’s Order Adopting Federal Energy Regu-

latory Commission Order Approving Contested Settle-

ment in Docket Nos. P-89-1, et at, In re Formal

Complaint of Tesoro Alaska Petroleum Co., Order P-

89-1(87) (1998).

For rules and regulations other than the TAPS

Quality Bank Methodology tariff see F.E.R.C. No. 26

(BP), F.E.R.C. No. [W] 161 (ExxonMobil), F.E.R.C.

No. [W] 14 (Phillips Transportation), F.E.R.C. No.

189 (Unocal), F.E.R.C. No. 2 (Williams), supplants

thereto and reissues thereof.

The provisions published herein will, if effective,

not result in an effect on the quality of the human

environment.

SPECIAL PERMISSION REQUESTED

Issued on fifteen days’ notice under authority of 18

C.F.R. § 341.14: This tariff publication is condition-

ally accepted subject to refund pending a 30-day

review period.

ISSUED BY

Donald C. Lutken, Jr., Albert N. Bolen,

President President

AMERADA HESS PIPELINE BP PIPELINES

CORPORATION (ALASKA) INC.

One Allen Center 900 East Balsam Boulevard

500 Dallas Street, Level 2 P.O. Box 190848

Houston, Texas 77002 Anchorage, Alaska 99519

Mike P. Tudor, President Joseph A. Blount,

EXXONMOBIL PIPELINE President

COMPANY UNOCAL PIPELINE

P.O. Box 2220 COMPANY

Houston, Texas 77252 14141 Southwest Freeway

Sugar Land, Texas 77478

18a

John M, Christal,

Vice President and

Controller

PHILLIPS TRANSPORTATION

ALASKA, INC.

700 G Street, ATO-920

Anchorage, Alaska 99501

Tina R. Changer,

Manager, Pipeline Tariffs

WILLIAMS ALASKA PIPELINE

COMPANY, LLC

1800 S. Baltimore Avenue

Tulsa, Oklahoma 74119

COMPILED BY

John E. Kennedy

1001 Fannin Street

Houston, Texas 77002

(713)758-2550

19a

Attachment 2F cancels Attachment 2E

ATTACHMENT 2F

COMPONENT UNIT VALUE PRICING BASIS

PROPANE (C.)

United States Gulf Coast United States West Coast |

Platt’s Mt. Belvieu, TX spot | OPIS’s (weekly) Los |

quote for Propane. Angeles delivered spot

quote for Propane. |

ISOBUTANE (IC,)

United States Gulf Coast United States West Coast |

Platt’s Mt. Belvieu, TX spot | OPIS’s (weekly) Los |

quote for Isobutane. Angeles delivered spot

a a ee

NORMAL BUTANE (nC,)

United States Gulf Coast United States West Coast

Platt’s Mt. Belvieu, TX spot

quote for Normal Butane.

OPIS’s (weekly) Los —

Angeles delivered spot

quote for Normal Butane.

LIGHT STRAIGHT RUN (C, -

175°F)

United States Gulf Coast

United States West Coast

——

Platt’s Mt. Belvieu, TX spot

quote for Natural Non-

Dynegy.

OPIS’s (weekly) Los

Angeles delivered spot

quote for Natural Gasoline.

—

NAPHTHA (175° - 350°F)

United States Gulf Coast

United States West Coast

Arithmetic average of (1)

Platt’s U.S. Gulf Coast spot

quote for Waterborne

Heavy Naptha and (2)

Platt’s U.S. Gulf coast spot

Arithmetic average of (1)

Platt’s U.S. Gulf Coast spot

quote for Waterborne

Heavy Naptha and (2)

Platt’s U.S. Gulf coast spot

20a

quote for Waterborne quote for Waterborne

Heavy Naptha Barge Heavy Naptha Barge

LIGHT DISTILLATE (350° - 450°F)

United States Gulf Coast United States West Coast

Platt’s U.S. Gulf Coast spot | Platt’s U.S. Gulf Coast spot

quote for Waterborne Jet quote for Waterborne Jet

Kerosene 54 less [I] 0.5623

cents per gallon

Kerosene 54 less [I} 0.5623

cents per gallon

HEAVY DISTILLATE (450° -

650°F)

United States Gulf Coast

United States West Coast

Platt’s U.S. Gulf Coast spot

quote for Waterborne No. 2

less{I] 2.2485 cents per

gallon

Platt’s U.S. Gulf Coast spot

quote for Waterborne Gasoit

for October 1999 less [U]

0.9973 cents per gallon

GAS OIL (650° - 1050°F)

United States Gulf Coast

United States West Coast

OPSI’s U.S. Gulf Coast spot

quote for barge High Sulfur

OPSI’s U.S. Gulf Coast spot

quote for barge High Sulfur

VGO | VGO

RESID (1050°F and Over)

United States Gulf Coast United States West Coast

Platt’s U.S. Gulf Coast spot

quote for Waterborne No. 6

Fuel Oil 3.0% Sulfur less [T)

5.0592 cents per gallon

Platt’s U.S. Gulf Coast spot

quote for Pipeline 380 cst at

Los Angeles converted to

$/Bb] using 6.37 Bbl/MT

less[I] 5.0592 cents per

gallon

Explanation of symbols:

{I} Increase

{UJ} Unchanged rate (adjustment)

[W] Change in wording only

2la

Quality Bank Tariff

Filing January 2005, FERC Docket Nos.

I1S05-121-000 through IS05-125-000

[Logo]

January 14, 2005

OIL PIPELINE FILING

SPECIAL PERMISSION REQUESTED

Magalie Sales, Secretary

Federal Energy Regulatory Commission

388 First Street, N.E.

Washington, D.C. 20426

Re: BP Pipelines (Alaska) Inc. Supplement No. 1 to

F.E.R.C. No. 30; ExxonMobil Pipeline Company

Supplement No. 1 to F.E.R.C. No. 218;

ConocoPhillips Transportation Alaska, Inc.

Supplement No. 1 to F.E.R.C. No. 3; Unocal

Pipeline Company Supplement No. 1 to F.E.R.C.

No. 273; Koch Alaska Pipeline Company, L.L.C.

Supplement No. 1 to F.E.R.C. No. 4

Dear Ms. Salas:

Enclosed for filing are three copies of each of the

following identical tariffs:

BP Pipelines (Alaska) Inc. Supplement No. 1 to

F.E.R.C No. 30; ExxonMobil Pipeline Company

Supplement No. 1 to F.E.R.C. No. 218; Conoco-

Phillips Transportation Alaska, Inc. Supplement

No. 1 to F.E.R.C. No. 3; Unocal Pipeline Com-

pany Supplement No. 1 to F.E.R.C. No. 273;

Koch Alaska Pipeline Company, L.L.C. Supple-

ment No. 1 to F.E.R.C. No. 4

22a

The companies issuing these tariffs are collectively

referred to herein as the TAPS Carriers.

On December 17, 1997 the Federal Energy Regula-

tory Commission issued Order Approving Contested

Settlement in Docket Nos. OR89-2-007, et al. Trans

Alaska Pipeline System, 81 F.E.R.C. J 61,319 (1997).

On January 13, 1998 the Alaska Public Utilities

Commission (“APUC”) issued its Order Adopting

Federal Energy Regulatory Commission Order Ap-

proving Contested Settlement in Docket Nos. P-89-1,

et al. In re Formal Complaint of Tesoro Alaska

Petroleum Co., Order P-89-1(87) (1998). One of the

terms of the settlement approved by the Commission

and the APUC is embodied in Item III.G.4. of the

tariffs to which the enclosed tariffs are supplements.

It requires that the adjustments to the reference

prices for Light Distillate, Heavy Distillate and Raid

in Attachment 2 to the tariffs be revised each year in

accordance with a specified formula.

The enclosed tariffs are filed in compliance with

the orders of this Commission and the APUC and

Item III.G.4. of the tariffs. Attachment 2G reflects

revised adjustments to the reference prices for the

Light Distillate, Gulf Coast Heavy Distillate and

Resid components for the year 2005 calculated in

accordance with the method prescribed in Item

III.G.4. A table showing the calculation is attached as

Exhibit A.

In accordance with orders of this Commission and

the APUC’s successor, the Regulatory Commission of

Alaska (“RCA”) and Item III.G.5. of the tariffs, the

reference price of West Coast Heavy Distillate has

not been revised. Pending a final decision by the

Commission and the RCA on the appropriate process-

ing cost adjustment to the replacement product price,

23a

the Quality Bank continues to use the October 1999

adjusted reference price for West Coast Heavy

Distillate. See Trans Alas*a Pipeline System, 90

F.E.R.C. 7161,123 (2000); In re Filing of a Notice by

the Trans Alaska Pipeline System Quality Bank

Administrator, P-99-12(2) (2000).

Although the enclosed tariff uses the symbol [U] for

“Unchanged rate” in Attachment 2G, the figure

following that symbol is not, in fact, a rat; but an

adjustment to a reference price used in the Quality

Bank methodology.

Pursuant to Section 6(3) of the Interstate

Commerce Act and 18 C.F.R. § 341.14, the TAPS

Carriers request special permission for the enclosed

tariffs to be effective on February 1, 2005, which is

seventeen days’ notice. As noted above, these tariffs

arc filed to comply with the orders of this Commis-

sion and the APUC and Item III.G.4. of the presently

effective Quality Bank Methodology tariffs. Moreover,

the data necessary to calculate the revised adjust-

ments (from the January Oil & Gas Journal) is not

available in time to make the required tariff filing

more than 30 days prior to February 1, 2005. Because

the Quality Bank adjustments are calculated on a

monthly basis, it is important that the tariff revisions

become effective on February 1, 2005.

Pursuant to 18 C.F.R. § 343.3 of the Commission’s

regulations, each of the TAPS Carriers other than

Koch Alaska Pipeline Company, L.L.C. hereby re-

quests that any protest to its enclosed filing be

telefaxed at the time it is filed to its counsel, John E.

Kennedy, at the following telefax number. (713) 615-

5273. Koch Alaska Pipeline Company, L.L.C. re-

quests that any protest to its enclosed filing be

24a

telefaxed to its counsel, John B. Rudolph, at the

following telefax number: (202) 973-1212.

I hereby certify that on or before this day a copy of

the enclosed tariffs has been sent to each subscriber

on the subscriber list of the appropriate TAPS

Carrier by first-class mail or other agreed-upon

means of transmission.

Any questions regarding the accompanying tariff

should be addressed to John E. Kennedy at (713) 758-

2550.

Respectfully submitted,

/s/ John E. Kennedy

John E. Kennedy

Counsel for BP Pipelines

(Alaska) Inc.,

ExxonMobil Pipeline Company,

Conoco Phillips Transportation

Alaska, Inc., and

Unocal Pipeline Company

Exhibit A

TAPS Quality Bank

Index Ratio & Price Adjustments

Effective: February, 2005

Meteon-ferrar index Ratio

{ index Ratio: 473.1 | 407 « 1.0280 |

index Date issusDate index index Date ieeue Dete Index

482 “Sep-2003.°~C a0) “611

Oct-2002 ww2003 «0 «453.2 Oct-2003 3/1/2004 463.9

Nov-2002 4772003 «= 4482 Now-2003 4/5/2004 466.2

Dec-2002 6/5/2008 «450.5 Dec-2003 5/3/2004 457.4

Jan-2003 @272003 4614 Jan-2004 6/7/2004 470.8

Feb-2003 7712003 «478.6 Feb-2004 7/5/2004 4718

Mes-2003 8/4/2008 «485.3 Mar-2004 8/2/2004 4718

Apr-2003 9/2003 («450.3 Agr-2004 @/e/2004 4715

May2003 1082009 4552 Mary-2004 10/4/2004 480.1

Jun-2003 «11/2003 481.2 Jun-2004 11/1/2004 486.2

Jul-2003 12/1/2003 4655 Ju-2004 12/8/2004 488.0

Aug-2003 1 461.7 Aug-2004 1 488.2

Average here 473.1

Reterence Price Adjustments

(This year's Price Adjustments) = (Last year's Price Adjustments) x (index Reto)

Guat Coast West Cosst

_{¢/Ga)__ ($85) _ —_{¢/Ge)__ (S/S) _

_Light Distillate

2004 D562 Dome 253 «ze

2005 OS774 0.2425 OSTI4 §=—- 0.2425

Meevy Otetiliate

2004 22486 0.0644 1043 + O4?22

2008 «= «-23080 | 0.9008 1.1545 0.4849

eekc

Pt. ery) 0s 2.1249

2005 461963 -2.1820 4.1963 2.1820

26a

Supplement No. 1 to F.E.R.C. No. 30 (BP)

Supplement No. 1 to F.E.R.C. No. 3 (ConocoPhillips)

Supplement No 1 to F.E.R.C. No. 218 (ExxonMobil)

Supplement No. 1 to F ™.R.C. No. 4 (Koch)

Supplement No. 1 to F.E.x.C. No. 273 (Unocal)

BP PIPELINES (ALASKA) INC. (BP);

CONOCOPHILLPS TRANSPORTATION ALASKA,

INC. (CONOCOPHILLIPS); EXXONMOBIL

PIPELINE COMPANY (EXXONMOBIL); KOCH

ALASKA PIPELINE COMPANY, L.L.C. (KOCH);

UNOCAL PIPELINE COMPANY (UNOCAL)

LOCAL PIPELINE TARIFF

CONTAINING THE TAPS

QUALITY BANK METHODOLOGY

ISSUED JANUARY 14, 2005

EFFECTIVE FEBRUARY 1, 2005

GENERAL APPLICATION

This tariff shall apply only to those tariffs which

specifically incorporate this tariff, supple vans to this

tariff and successive issues hereof by reference

NOTICES

The changes noted in Attachment [W] 2G are made

to comply with this Commission’s Order Adopting

Contested Settlement in Docket No. OR89-2-007,

et al., Trans Alaska Pipeline System, 81 F.E.R.C.

{@ 61,319 (1997), and the Alaska Public Utilities

Commission’s Order Adopting Federal Energy Regu-

latory Commission Order Approving Contested Set-

tlement in Docket Nos. P-89-1 et al. In re Formal

Complaint of Tesoro Alaska Petroleum Co., Order

P-89-1(87) (1998).

27a

For rules and regulations other this the TAPS

Quality Bank Methodology tariff see F.E.R.C. No. 26

(BP), F.E.R.C. No. (W) 6 (ConocoPhillips), F.E.R.C.

No. 161 (ExxonMobil), F.E.R.C. No. 2 (Koch).

F.E.R.C. No. 189 (Unocal), supplements thereto and

mimics thereof.

The provisions published herein will, if effective,

not result in an effect on the quality of the human

environment.

SPECIAL PERMISSION REQUESTED

Issued on 17 days’ notice under authority of 18

C.F.R. § 341.14. This tariff publication is condition-

ally accepted subject to refund pending a 30-day

review period

ISSUED BY

Mike P. Tudor, President Albert N. Bolen,

EXXONMOBIL PIPELINE President

COMPANY BP PIPELINES

P.O. Box 2220 (ALASKA) INC.

Houston, Texas 77252 900 East Balsam Boulevard

John M, Christal, P.O. Box 190848

Vice President and Controller Anchorage, Alaska 99519

PHILLIPS TRANSPORTATION Joseph A. Blount,

ALASKA, INC. President

700 G Street, ATO-920 UNOCAL PIPELINE

Anchorage, Alaska 99501 COMPANY

14141 Southwest Freeway

Richard L. Barnaby, Sugar Land, Texas 77478

Manager, Tariff Coordinator

KOCH ALASKA PIPELINE COMPILED BY

COMPANY, LLC. John E. Kennedy

P.O. Box 2913 1001 Fermin Street

Wichita, Kansas 67201 Houston, Texas 77002

(713) 758-2550

28a

Attachment 2G cancels Attachment 2F

ATTACHMENT 2G

COMPONENT UNIT VALUE PRICING BASIS

PROPANE (C,)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Propane

OPIS’s (weekly) Los

Angeles delivered spot

quote for Propane.

ISOBUTANE (IC,)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Isobutane

OPIS’s. (weekly) Los

Angeles delivered spot

quote for Isobutane.

NORMAL BUTANE (nC,).

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote’ for Normal

Butane

OPIS’s (weekly) Los

Angeles delivered spot

quote for Normal Butane.

LIGHT STRAIGHT RUN (C, -175°F)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Natural

Non-Dynegy :

OPIS’s Los

Angeles spot

quote Natural

Gasoline.

(weekly)

delivered

for

NAPHTHA (175° - 350°F)

United States Gulf Coast

Arithemtic average of

(1)Platt’s U.S. Gulf Coast

spot quote for Water-

United States West Coast

Arithemtic average of

(1)Platt’s U.S. Gulf Coast

spot quote for Water-

29a

borne Heavy Naptha and

(2) Platt’s U.S. Gulf Coast

spot quote for Water-

borne Heavy Naptha

Barge

borne Heavy Naptha and

(2) Platt’s U.S. Gulf Coast

spot quote for Water-

borne Heavy Naptha

Barge

LIGHT DISTILLATE (350° - 450°F)

United States Gulf Coast

United States West Coast

Platt’s U.S. Gulf Coast

spot quote for Water-

borne Jet Kerosene 54

less [I] 0.5774 cents per

gallon

Platt’s U.S. West Coast

spot quote for Water-

borne Jet Fuel less

[1]0.5774 cents per gal-

lon.

HEAVY DISTILLATE (450° - 650°F)

United States Gulf Coast

United States West Coast |

Platt’s U.S. Gulf Coast

Platt’s U.S. West Caost

spot quote for Water-| spot quote for Water-

borne No. 2 less [I] | borne Gasoil for October

2.3090 cents per gallon 1999 less |[U) 0.9973

cents per gallon.

GAS OIL (650° - 1050°F)

United States Gulf Coast

United States West Coast

Platt’s Mt. Belvieu, TX

spot quote for Propane

OPIS’s (weekly) Los An-

geles delivered spot quote

for Propane.

RESID (1050°F and Over)

United States Gulf Coast

United States West Coast

Platt’s U.S.Gulf Coast

spot quote for Water-

borne No.6 Fuel Oil 3.0%

Slfur less [I] 5.1953 cents

_ per gallon.

Platt’s U.S West Coast

spot quote for Pipeline

380 cst at Los Angeles

converted to $/Bbl using

6.37 BbI/MT less

(1]5.1953 cents per gallon

30a

Explanation of symbols:

[I] Increase

[U] Unchanged rate (adjustment)

(W] Change in wording only

3la

APPENDIX B

Protest of Flint Hills Resources Alaska LLC to

Compliance Filing of the TAPS Carriers

UNITED STATES OF AMERICA 3

FEDERAL ENERGY REGULATORY COMMISSION

Docket No. ORO6-10-000

BP Pipelines (Alaska) Inc.

ConocoPhillips Transportation Alaska, Inc.

ExxonMobil Pipeline Company

Koch Alaska Pipeline Company

Unocal Pipeline Company

STATE OF ALASKA

REGULATORY COMMISSION OF ALASKA

Docket No. P-06-10

BP Pipelines (Alaska) Inc.

ConocoPhillips Transportation Alaska, Inc.

ExxonMobil Pipeline Company

Koch Alaska Pipeline Company

Unocal Pipeline Company

PROTEST OF FLINT HILLS RESOURCES

ALASKA LLC TO COMPLIANCE

FILING OF THE TAPS CARRIERS

Pursuant to Rule 211 of the Commission’s Rules of

Practice and Procedures, 18 C.F.R. § 385.211 (2007),

Flint Hills Resources Alaska LLC (“FHR”) hereby

submits its protest to the April 2, 2008 Compliance

Filing of the TAPS Carriers in this matter. Specifi-

cally, FHR protests the proposed effective date of

June 1, 2006 as violating Section 4412 of the Motor

32a

Carrier Safety Reauthorization Act of 2005.' That law

prohibits retroactive application of TAPS quality

bank adjustments for any period that exceeds the 15-

month period preceding the date of the first Commis-

sion order imposing new quality bank adjustments in

this proceeding.

I. BACKGROUND

On March 25, 2008, the Commission issued Opin-

ion No. 500° addressing “the processing cost adjust-

ment to the West Coast Heavy Distillate cut under

the current methodology for valuing the TAPS crude

oil under Opinion No. 481.”° The Commission did not

calculate the total adjustment that would result from

application of the findings in Opinion No. 500 regard-

ing the various component cost elements, but directed

the TAPS Carriers to make a compliance filing “es-

tablishing the processing cost adjustment for the

West Coast Heavy Distillate cut.”* The April 2, 2008

Compliance Filing at issue here was filed in response

to that directive.

II. PROTEST

Section 4412(b)(2) of the Motor Carrier Safety Re-

authorization Act of 2005, Pub. L. No. 109-59, effec-

tive August 10, 2005, provides in pertinent part that

Pub. L. No. 109-59, 119 Stat. 1714 (2005).

* BP Pipelines (Alaska) Inc.,122 FERC 4 61,236 (2008) (“Opin-

ion No. 500”).

* Opinion No. 500 at P 1, citing Trans Alaska Pipeline System,

113 FERC 961,062 (2005) (Opinion No. 481), order on reh'ring,

114 FERC 461,323 (Opinion No. 481-A) and 115 FERC 461,287

(2006) (Opinion No. 481-B), affd Petro Star Inc. v. FERC (D.C.

Cir. No. 06-1166, et al. (March 6, 2008)).

* Ordering Paragraph B of Opinion No. 500.

33a

“liln a proceeding commenced after the date of en-

actment of this Act, the Commission may not order

retroactive changes in TAPS quality bank adjust-

ments for any period that exceeds the 15-month pe-

riod immediately preceding the earliest date of the

first order of the Federal Energy Regulatory Com-

mission imposing quality bank adjustments in the

proceeding.” The complete text of Section 4412 is at-

tached as Appendix A.

Section 4412(b)(2)’s directive is clear: in a case

where the statute applies, FERC has no jurisdiction

to order a retroactive change in the quality bank ad-

justments for any period that exceeds 15 months

prior to issuance of the order imposing the changes,

Here, there is no dispute as to the statute’s applica-

bility, as this proceeding was initiated after the stat-

ute’s enactment date of August 10, 2005.° And, by

proposing an effective date of June 1, 2006 for their

compliance filing, the TAPS Carriers seek to impose

retroactive quality bank adjustments.

The only issue then is how the 15-month statutory

limit on retroactive adjustments is to be applied in

this case, and that turns on identifying what is “the

first order of the [FERC] imposing quality bank ad-

justments in the proceeding.” (Emphasis added).

There are only two possible choices: Opinion No. 500,

affirming the Initial Decision’s recommended princi-

ples for determining the various cost components

that comprise the processing cost adjustment for

West Coast Heavy Distillate, or a yet-to-be-issued or-

der approving the specific adjustments that were

formulated for the first time in the TAPS Carriers’

instant compliance filing.

* See BP Pipelines (Alaska) Inc., 116 FERC 161,291 (2006).

34a

Congress’s use of the term “imposing” with regard

to quality bank adjustments reflects the intent to re-

fer to an order that approves the fina] quantification

of a new adjustment. Absent such quantification, it is

difficult to imagine how an adjustment can be “im-

posed” on shippers. Thus, while Opinion No. 500 ap-

proved how the adjustments should be calculated, it

did not approve, establish or impose any specific

quantified adjustments. To the contrary, Opinion No.

500, Ordering Para. (B), directed the TAPS Carriers

to make a compliance filing “establishing” numerical

cost adjustments that are consistent with the princi-

ples set out in the Opinion.

Thus, Section 4412’s language is properly inter-

preted to mean that the Commission’s eventual order

approving the numerical quality bank adjustments

calculated in the compliance filing will constitute the

“first order. . . imposing quality bank adjustments.”

Neither Opinion No. 500 nor the underlying Initial

Decision affirmed by that order contained any calcu-

lation of the quality bank adjustment for West Coast

Heavy Distillate.° That calculation was made for the

first time in the TAPS Carriers’ compliance filing,

and, until approved by the Commission, does not be-

come an.adjustment that can be “imposed” on TAPS

quality bank participants.’

* See Opinion No. 500 at P 172 (noting neither ID nor Opinion

assigned values to required changes).

’ The TAPS Carriers previously argued that the “first order”

under Section 4412 should be interpreted to mean the Septem-

ber 26, 2006 Order setting this matter for hearing and approv-

ing use of an interim processing cost adjustment. See “Answer of

Indicated TAPS Carriers etc.,” at 5-6 (filed December 20, 2006).

That interpretation runs contrary to clear Congressional intent,

and would render the 15-month statutory limitation a nullity.

35a

The legislative history is consistent with this inter-

pretation. Congress intended that the permissible

retroactive 15-month period end on the date of a

Commission order approving adjustments that indi-

cate exactly how much the change would cost refin-

ers. The legislative history shows that Section 4412

originated with the introduction of two bills, S. 822 in

the Senate and H.R. 2038 in the House. The former

bill, which is attached as Appendix B, would have

prohibited the Commission from making any retroac-

tive adjustment. The remarks by the bill’s sponsors

explain that prospective application of any adjust-

ments was intended to avoid the uncertainty created

by adjustments occurring long after the crude oil was

processed:

The problem is that both of the refineries must

make long- and short-term business decisions

based on crude costs when they process crude oil

into product. Refineries optimize their produc-

tion slates based on current market realities. It

is difficult for them to operate, given low profit

margins, if oil values can change years later as a

result of Quality Bank decisions. They simply

have no way to make rational business decisions

when the value of their products can be deter-

mined retroactively long after they can protect

themselves for perceived mistakes in FERC-

approved valuation methodologies. This certainly

threatens the ability of the refineries to attract

capital, money needed for them to modernize and

meet new ultra-low sulfur diesel “clean fuel” re-

quirements soon to go into effect.

151 Cong. Rec. $3752 (daily ed. April 15, 2005)

statement of Sen. Murkowski).

36a

The bill’s sponsors described prohibiting retroac-

tive application as the solution for that uncertainty:

Requiring FERC to apply valuation methodology

changes in connection with any future disputes

on a prospective basis only will eliminate the risk

and uncertainty associated with the prospect of

nearly unlimited retroactive application of Qual-

ity Bank payment methodology changes. That

will allow all Quality Bank participants to be

able to conduct business with the certainty of

knowing that prices received and paid for oil to-

day cannot be altered years down the road.

Id.; see also id. at S.3752-53 (remarks of Sen. Ste-

vens)(“This legislation is necessary to limit business

uncertainty with the use of the Trans Alaska Pipeline

System, and to ensure continued domestic refinery

activity in order to protect national fuel supplies.”).

This discussion makes clear that the sponsors of

the original bill intended to eliminate any uncer-

tainty related to retroactive application by limiting

quality bank adjustments to a prospective-only basis.

“Prospective-only” for this purpose meant from the

point in time when FERC determines what the exact

amount of any new quality adjustments will be. See

id. at S 3752 (remarks of Sen. Murkowski)(“That will

allow [refiners] to be able to conduct business with

the certainty of knowing that price received and paid

for oil today cannot be altered years down the road.”)

(emphasis added).

Obviously, S. 822 was not enacted as originally in-

troduced. As is often the case with the legislative

process, compromises were made. In this case, the

legislation ultimately enacted replaced the originally-

introduced “no retroactive/prospective-only” model

37a

with a 15-month period of retroactive application.*

But the initial “prospective-only” concept in the

original bill suggests that the 15-month retroactive

period ultimately enacted should be the period im-

mediately preceding the date on which the new ad-

justments would be allowed on a “prospective-only”

basis.” Or, stated another way, the legislative com-

promise allowed adjustments to go into effect 15

months earlier than would have been allowed under

the original bills.

The issue thus becomes: on what date could the

quality bank adjustments allowed by Opinion No. 500

go into effect on a prospective-only basis; that date

would then serve as the end point for Section 4412’s

15-month period. The precedent indicates that this

cannot occur until after the FERC rulings at issue

are translated into numerical adjustments that have

been approved by the Commission. “FERC ‘fixes’ a

* The 15-month period is similar to the 15-month refund pe-

riod allowed by Section 206(b) of the Federal Power Act, 16

U.S.C. § 824e(b).

* The legislative history also makes clear that the term “ret-

roactive” is intended to refer to any attempt to apply a change in

the quality bank adjustmen: for a past period, including retroac-

tive changes that, as here, are expressly authorized under the

terms of the tariff. The legislation was directed toward avoiding

any retroactive application of new quality bank adjustments in

that situation, as suggested by Senator Murkowski’s and Sena-

tor Stevens’ references to a D.C. Circuit opinion “in 1999 [that]

told FERC to revise some particular details of the Resid valua-

tion and also held that FERC had ‘failed to provide an adequate

explanation’ as to why the new methodology should not be made

retroactive to 1993.” 151 Cong. Rec. at S3751. Clearly, the refer-

enced case is Exxon Co., USA v. FERC, 182 F.3d 30, 49 (D.C.

Cir. 1999), where the Court remanded the retroactivity question

“because all of the TAPS shippers were on notice as of 1993 that

the valuations were contested.”

38a

new rate on the date it approves a gas company’s

compliance filing that specifies its exact rates—not

on the date of an earlier Commission opinion describ-

ing the legal and accounting principles to be used in

calculating the new rates.” Panhandle Eastern Pipe

Line Co. v. FERC, 881 F.2d 1101, 1120 (D.C. Cir.

1989).

Like the situation in Electrical Dist. No. 1 v. FERC,

774 F.2d 490 (D.C. Cir. 1985), Opinion No. 500 de-

termined the principles under which new quality

bank adjustments would be set, but left for the TAPS

Carriers and the QBA to translate those principles

into specific, numerical quality bank adjustments

through a compliance filing. Indeed, Opinion No. 500

at P 172 disclaimed that any valuation had been put

on the adjustments by either the ALJs or the Com-

mission:

The law is clear that the ALJs are not required

to determine the precise value that results from

their rulings, and their obligation is only to de-

cide the disputed issues presented to them by the

parties. The ALJs properly left it to the QBA and

the TAPS Carriers to calculate the precise value

of the Heavy Distillate cut in compliance with

the rulings in the ID or as modified by the Com-

mission, a practice consistently followed by the

Commission and upheld by the courts. Moreover,

in prior TAPS Quality Bank Commission orders,

the actual cost adjustment was left to the QBA,

which the ALJs followed in this proceeding.

(Footnotes citing Electrical District, among other

cases, omitted).

The necessity to translate those principles into spe-

cific quality bank adjustments through a compliance

39a

filing was reinforced in Opinion No. 500, Ordering

Paragraph (B), which states: “TAPS Carriers are

hereby directed to make a compliance filing establish-

ing the processing cost adjustment for the West Coast

Heavy Distillate cut within thirty days of this order,

unless there is a request for rehearing, in which case

the compliance filing must be made within thirty

days of a final order by the Commission.” If anything,

this language highlights the possible uncertainty re-

lated to when and how those principles would be

translated to actual adjustments by relieving the

Carriers of the need to make an immediate compli-

ance filing on the possibility that rehearing requests

could lead to some change in the Opinion No. 500 rul-

ings, and thus to the exact adjustments that would go

into effect.

The nature of the compliance filing here, four ta-

bles translating the Opinion No. 500 rulings into

numerical adjustments, underscores that no quality

bank adjustments had been fixed, and therefore could

not be imposed, until the compliance filing was made.

See Compliance Filing at 2 (“the processing cost ad-

justments to be used in the recalculation of Quality

Bank adjustments” are the listed numerical cents per

gallon adjustments). Based on the reasoning from

Electrical District, 774 F.2d at 492, these facts indi-

cate that any adjustment under Opinion No. 500

could neither go into effect nor be imposed until a

compliance filing was made and approved:

It is uncontested (and uncontestable) that under

current FERC practice no numerical rate is

specified until after the compliance filing is ac-

cepted. The assumption of the Commission’s ar-

gument, however, is that to “fix” a rate within

the meaning of the statute it is enough to pre-

40a

scribe the legal and accounting principles which,

properly applied, will yield one particular rate;

whereas petitioners maintain that the statute

means what it says., and requires the rate itself

' to be specified. We agree with petitioners. . . .

The same conclusion applies here: Opinion No. 500

prescribed the legal and accounting principles that

would be used to calculate the adjustments, but, as

the quoted language from P172 of the Opinion

shows, those principles were not fixed into adjust-

ments that could be imposed on shippers until the

compliance filing was made.

In summary, given that quality bank adjustments

at issue here must be fixed in numerical form by the

compliance filing before they can be imposed, it fol-

lows that the first order imposing such adjustments,

within the meaning of Section 4412, will not occur

until Commission approval of the compliance filing.

Consequently, the 15-month period under Section

4412 will not be calculable until the date of that fu-

ture order approving the compliance filing, as that

would be “the earliest date of the first order” impos-

ing such adjustment in this proceeding. This means

the new quality bank adjustments can go into effect

no earlier than 15 months prior to the date of that

order (e.g., if an order approving the compliance filing

issues on May 1, 2008, the earliest date on which the

adjustments could go into effect would be February 1,

2007).

Accordingly, Flint Hills protests the proposed June

1, 2006 effective date, and requests that the Commis-

sion find that the quality bank adjustments allowed

by Opinion No. 500 will not be fixed, and thus cannot

be imposed within the meaning of Section 4412, until

the date of an order approving the compliance filing

4la

in this proceeding. At the time such an order issues,

the Commission should determine the starting point

of the statutory 15-month period, and allow the ad-

justments to go into effect as of that starting point.

Respectfully submitted,

/s/ Dennis Lane

JAMES M.ARMSTRONG DAVID D’ALESSANDRO

FOULSTON SIEFKIN . LLP DENNIS LANE

1551 N. Waterfront Parkway SINSON MORRISON

Suite 100 HECKER LLP

Wichita, Kansas 67206 1150 18th Street N.W.

316.291.9576 Suite 800

Washington, D.C. 20036

TRAVIS A. PEARSON 202.728.3014

J. KORY PARKHURST

FLINT HILLS RESOURCES

4111 East 37th Street North

Wichita, Kansas 67201

316.828.8594

42a

APPENDIX A

SEC. 4412. QUALITY BANK ADJUSTMENTS.

(a) DEFINITION OF TAPS QUALITY BANK

ADJUSTMENTS.—In this section, the term “TAPS

quality bank adjustments” means monetary adjust-

ments paid by or to a shipper of oil on the Trans

Alaska Pipeline System through the operation of a

quality bank to compensate for the value of the oil of

the shipper that is commingled in the Pipeline.

(b) PROCEEDINGS.—

(1) INGENERAL.—In a proceeding commenced be-

fore the date of enactment of this Act, the Federal

Energy Regulatory Commission may not order retro-

active changes in TAPS quality bank adjustments for

any period before February 1, 2000.

(2) PROCEEDINGS COMMENCED AFTER THE

DATE OF ENACTMENT.—In a proceeding com-

menced after the date of enactment of this Act, the

Commission may not order retroactive changes in

TAPS quality bank adjustments for any period that

exceeds the 15-month period immediately preceding

the earliest date of the first order of the Federal En-

ergy Regulatory Commission imposing quality bank

adjustments in the proceeding.

(1) IN GENERAL.—A claim relating to a quality

bank under this section shall be filed with the Fed-

eral Energy Regulatory Commission not later than 2

years after the date on which the claim arose.

(2) FINAL ORDER.—Not later than 15 months af-

ter the date on which a claim is filed under para-

graph (1), the Federal Energy Regulatory Commis-

43a

sion shall issue a final order with respect to the

claim.

Motor Carrier Safety Reauthorization Act, Pub. L.

No. 109-59, 119 Stat. 1714, 1778-79 (2005).

44a

Appendix B

109TH CONGRESS

1ST SESSION

S.822

To prevent the retroactive application of changes to

Trans-Alaska Pipeline Quality Bank valuation meth-

odologies.

IN THE SENATE OF THE UNITED STATES

APRIL 15, 2005

Ms. MURKOWSKI (for herself and Mr. STEVENS)

introduced the following bill; which was read twice

and referred to the Committee on Energy and

Natural Resources

A BILL

To prevent the retroactive application of changes to

TransAlaska Pipeline Quality Bank valuation meth-

odologies.

Be it enacted by the Senate and House of Represen-

tatives of the United States of America in Congress

assembled,

SECTION 1. DEFINITIONS.

In this Act:

(1) COMMISSION.—The term “Commission”means

the Federal Energy Regulatory Commission.

(2)TAPS QUALITY BANK VALUATION

METHODOLOGIES.—The term “TAPS quality bank

valuation methodologies” means valuation method-

ologies applied for the purpose of establishing mone-

45a

tary adjustments paid by or to shippers of oil on the

Trans-Alaska Pipeline (as authorized by the Trans-

Alaska Pipeline Authorization Act (43 U.S.C. 1651 et

seq.) through the operation of a quality bank to com-

pensate for differentials in the value of shippers’ oil

commingled in the pipeline.

SEC. 2. FEDERAL ENERGY REGULATORY

COMMISSION REVIEW OF TRANS-ALASKA

PIPELINE CARRIER TARIFFS.

Pursuant.to the ratemaking authority of the Com-

mission under section 60501 of title 49, United States

Code, in carrying out a review of Trans-Alaska Pipe-

line carrier tariffs, the Commission shall not approve

any retroactive application of TAPS quality bank

valuation methodologies.

SEC. 3. EFFECTIVE DATE.

This Act applies to orders of the Commission issued

after December 31, 2005.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.